IRS: 401(k) limit increases to $24,500 for 2026

WASHINGTON — In a move that’s sure to catch the attention of workers and retirees across the country, the Internal Revenue Service announced that individuals will be able to contribute more to their retirement plans in 2026. The new annual limit for 401(k) plans jumps to $24,500, up from $23,500 in 2025, giving savers a little extra room to prepare for the future (See the Official IRS Changes by Clicking Here). Rodney Foushee with the IRS confirmed the change with WGNS Radio about 11-days ago stating, "The amount individuals can contribute to their 401(k) plans and similar employer-sponsored retirement savings plans has been increased to $24,500 for 2026, up from $23,500 for 2025. The limit on annual contributions to an IRA is increased to $7,500 from $7,000."

IRS Issues Guidance on Cost-of-Living Adjustments - Alongside the headline-grabbing increase, the IRS released technical guidance covering all cost-of-living adjustments for pension plans and other retirement-related items for the 2026 tax year. The details are available in Notice 2025-67, now posted on IRS.gov, and they touch on a wide range of retirement savings vehicles.

What’s Changing for 2026?  For employees participating in 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan, the annual contribution limit is now $24,500. That’s a $1,000 increase over last year, and it’s not the only bump. The IRA contribution limit is also rising, from $7,000 to $7,500. If you’re 50 or older, the catch-up contribution limit for IRAs is now $1,100, up from $1,000, thanks to the SECURE 2.0 Act of 2022, which added an annual cost-of-living adjustment.

Catch-Up Contributions Get a Boost

Older workers aren’t left out. The catch-up contribution limit for those 50 and over participating in most 401(k), 403(b), and governmental 457 plans, as well as the Thrift Savings Plan, is now $8,000. That means eligible participants can sock away up to $32,500 in 2026. There’s better news for those aged 60 to 63: a higher catch-up limit of $11,250 still applies for these plans.

Income Ranges for IRA Deductions and Credits Expand

Eligibility for deductible IRA contributions, Roth IRAs, and the Saver’s Credit is also expanding. For single taxpayers covered by a workplace retirement plan, the phase-out range is now $81,000 to $91,000. Married couples filing jointly see their range rise to $129,000 to $149,000. If you’re married to someone covered by a workplace plan but aren’t covered yourself, your phase-out range is now $242,000 to $252,000. For married individuals filing separately, the range remains $0 to $10,000.

Roth IRA and Saver’s Credit Limits Increase - Roth IRA contributors will see their income phase-out range increase to $153,000 to $168,000 for singles and heads of household, and $242,000 to $252,000 for married couples filing jointly. The Saver’s Credit income limit is now $80,500 for married couples, $60,375 for heads of household, and $40,250 for singles.

SIMPLE Retirement Accounts See Higher Limits - SIMPLE retirement accounts also get a boost, with the general contribution limit rising to $17,000 and a higher limit of $18,100 for certain accounts. Catch-up contributions for those 50 and older are now $4,000, with special limits for certain plans remaining unchanged.

Major Retirement Plan Limit Changes (2026):

Defined Benefit & Defined Contribution Plans

• Defined Benefit Plan limit increases from $280,000 → $290,000.
• Defined Contribution (401(a)/profit-sharing) limit increases from
  $70,000 → $72,000.

401(k), 403(b), 457 & Thrift Savings Plan

Elective Deferrals

• Annual employee deferral limit increases from
  $23,500 → $24,500.

457(b) Government/Nonprofit Plans

• Limit increases $23,500 → $24,500 (matches 401(k)).

Catch-Up Contributions

Age 50+ Standard Catch-Up

• Increases $7,500 → $8,000 for most retirement plans.

Special Age 60–63 Catch-Up (SECURE 2.0)

• Remains unchanged at $11,250 for 2026 (major plans).
• SIMPLE plan 60–63 catch-up remains $5,250.

Roth-Only Catch-Up Rule Income Threshold

• Income threshold requiring catch-up contributions to be Roth increases
  from $145,000 → $150,000.

SIMPLE & Starter Plans

SIMPLE IRA / SIMPLE 401(k)

• Employee contribution limit increases $16,500 → $17,000.
• Higher SIMPLE limit tier increases $17,600 → $18,100.
• SIMPLE Age 50+ catch-up increases $3,500 → $4,000.

Starter 401(k)/403(b)

• Contribution limit remains $6,000 (+$1,100 catch-up for age 50+).

Compensation Limits

• Highly Compensated Employee (HCE) threshold remains $160,000.
• Key Employee (Top-Heavy) threshold increases $230,000 → $235,000.
• General Annual Compensation Limit increases
  $350,000 → $360,000.
• Govt. Plan Compensation (grandfathered) increases $520,000 → $535,000.

IRAs (Traditional & Roth)

Traditional IRA Deduction

• Max deductible IRA contribution increases $7,000 → $7,500.
• Age 50+ catch-up increases $1,000 → $1,100.

Income Phase-Out Ranges (Active Participants)

Traditional IRA deduction phase-outs:

Roth IRA Contribution Income Limits

Saver’s Credit (Retirement Savings Contribution Credit)

Income limits increase for all filing statuses:

• Married filing jointly:
  • Tier thresholds increase to $48,500, $52,500, $80,500.
• Head of Household:
  • Thresholds increase to $36,375, $39,375, $60,375.
• Single/Other filers:
  • Thresholds increase to $24,250, $26,250, $40,250.

Other Notable Adjustments

• Pension-linked emergency savings accounts: Limit rises $2,500 → $2,600.
• ESOP 5-year distribution maximum account balance:
  $1,415,000 → $1,455,000.
• Volunteer service awards (457(e)(11)) increase $7,500 → $8,000.
• Charitable IRA QCD limits:
  • Annual QCD limit $108,000 → $111,000.
  • QCD to split-interest entity $54,000 → $55,000.

SIMPLE Additional Nonelective Contributions

• Increases $5,100 → $5,300.