2026 Retirement Contribution Limit Updates!
The IRS has released the inflation-adjusted contribution limits for the 2026 tax year. These increases affect IRAs, employer-sponsored retirement plans, and self-employed retirement accounts. Understanding the new limits helps ensure savings strategies remain aligned with long-term retirement objectives. Several changes also stem from ongoing implementation of the SECURE Act 2.0, which continues to expand retirement savings opportunities.
Traditional and Roth IRAs
The contribution limit for both Traditional and Roth IRAs increases to $7,500 in 2026.
This is up from $7,000 in 2025.
The catch-up contribution for individuals age 50 and older rises to $1,100, bringing the total possible IRA contribution to $8,600.
Income-based eligibility rules for Roth IRA contributions and income-based deductibility limits for Traditional IRAs remain in effect. These limits determine whether contributions are fully deductible, partially deductible, or nondeductible depending on income level and workplace plan participation.
Planning Note:
The higher IRA limit provides additional tax-advantaged space for individuals seeking to accelerate personal savings outside employer plans.
401(k), 403(b), 457, and Other Employer Plans
Employee elective deferrals increase to $24,500 for 2026.
This represents a $1,000 increase from 2025.
The standard catch-up contribution for individuals age 50 and older increases to $8,000, allowing total elective deferrals of $32,500.
For participants ages 60–63, the SECURE Act 2.0 “special catch-up” remains available.
This increased catch-up rises to $11,250 and is permitted only if the employer plan includes this feature.
The combined employer–employee annual additions limit increases to $72,000, up from $70,000 in 2025.
Beginning in 2026, catch-up contributions for “higher earners” (as defined by prior-year wages) must be made as Roth contributions, provided the plan offers a Roth option.
Planning Note:
Higher limits offer meaningful room for tax-advantaged savings. The Roth-only catch-up rule may alter tax planning for certain high-income participants and should be reviewed with a financial professional.
SEP IRAs and SIMPLE IRAs
SEP IRAs
The maximum employer contribution limit increases to $72,000 in 2026, based on the standard percentage-of-compensation formula.
SIMPLE IRAs
Employee deferrals increase to $17,000.
The SIMPLE catch-up contribution for individuals age 50 and older increases to $4,000, allowing a total contribution of $21,000.
Planning Note:
Self-employed individuals and small-business owners may benefit from reviewing whether a SIMPLE IRA, SEP IRA, or small-business 401(k) provides the most appropriate structure based on income level, business size, and desired savings capacity.
2026 Contribution Limits at a Glance
Traditional or Roth IRA
• Contribution Limit: $7,500
• Catch-Up (50+): $1,100
• Total: $8,600
401(k), 403(b), 457
• Contribution Limit: $24,500
• Catch-Up (50+): $8,000
• Total: $32,500
Special Catch-Up (Ages 60–63)
• Additional: $11,250
• Total Potential Elective Deferral: $35,750
SIMPLE IRA
• Contribution Limit: $17,000
• Catch-Up (50+): $4,000
• Total: $21,000
SEP IRA
• Employer Contribution Limit: $72,000
Steps Investors May Consider for 2026
• Review current contribution elections before the start of the plan year.
• Determine whether Roth or pre-tax contributions are more appropriate under the updated limits.
• Consider coordinating IRA and employer-plan contributions to maximize tax advantages.
• Evaluate retirement plan structures for self-employed individuals or small-business owners.
• Adjust savings strategies early in the year to capture the full benefit of higher limits.
Final Perspective
The 2026 contribution increases provide expanded opportunities for investors to strengthen their retirement readiness. Higher IRA limits, increased 401(k) catch-ups, and elevated SEP/SIMPLE thresholds offer more flexibility for a variety of savers. Reviewing contribution strategies early in the tax year is an effective way to ensure savings plans remain on track and aligned with long-term financial goals.
Disclosure
This material is for educational purposes only and is not intended as individualized financial advice. Contribution limits and tax rules are subject to change. Investors should consult a financial professional regarding their specific circumstances.
