Changes to Retirement Plan Limits in 2026
Every year, the IRS adjusts various retirement plan limits to account for inflation. The most common retirement plans include qualified plans, such as 401(k)s, IRAs, and SIMPLE plans for small businesses. These adjustments include changes to contribution limits, phaseout ranges, and other modifications. With the end of the year approaching, now is a good time to review your current contribution rates and determine if any adjustments need to be made going into 2026 to max out various retirement accounts.
Changes to 401(k)s & Other Qualified Retirement Plans
The IRS has announced cost-of-living adjustments to retirement plan contribution limits for 2026. 401(k) participants will be allowed to contribute $24,500 starting next year. This is a $1,000 increase from the current limit. The same increase will apply to 403(b)s, 457 plans, and the federal government’s Thrift Savings Plan.
Individuals aged 50 or older are eligible for catch-up contributions in addition to the standard contribution rates. Next year, the catch-up contribution limit rises to $8,000 from $7,500, for a total of $32,500. For individuals between the ages of 60 and 63, a “super catch-up” contribution of $11,250 is allowed, which is the same limit as this year. This brings the total annual contribution limit in 2026 to $35,750.
There is another significant change starting next year for higher-income earners aged 50 and older who also contribute to 401(k)s. Suppose in the prior year (2025) you made more than $145,000 in FICA wages (income subject to Social Security and Medicare taxes). In that case, any catch-up contributions you make will automatically be treated as a Roth 401(k) contribution. Meaning your contributions will automatically be subject to income taxes.
Changes to Traditional & Roth IRA Limits
Starting in 2026, you will be allowed to save up to $7,500 into a tax-deductible IRA or an after-tax Roth IRA. This is $500 more than you can save this year. The catch-up contribution limit for these two accounts will increase to $1,100, up from $1,000 in 2025.
Roth IRAs also have income phaseouts depending on your modified adjusted gross income (MAGI). If your MAGI falls within a range, you can make a reduced contribution. But if your MAGI reaches a certain threshold, you cannot contribute to a Roth IRA directly. Here are the income phaseout ranges for 2025 and the new limits for 2026 for Roth IRA contributions:
| Filing Status | 2025 MAGI Phaseout Range | 2026 MAGI Phaseout Range |
|---|---|---|
| Single/HOH | $150,000 to $165,000 | $153,000 to $168,000 |
| Married Filing Jointly | $236,000 to $246,000 | $242,000 to $252,000 |
| Married Filing Separately | $0 to $10,000 | $0 to $10,000 |
There is also a special phaseout provision for contribution deductibility regarding Traditional IRAs if you also participate in a workplace retirement plan. For example, suppose you actively contribute to a 401(k) at work AND you make Traditional IRA contributions. In that case, you may not be able to deduct those Traditional IRA contributions on your tax return if your MAGI is above a certain threshold. Here are the income phaseout ranges for 2025 and 2026 for Traditional IRA contribution deductibility if you are also an active participant in a workplace retirement plan:
| Filing Status | 2025 MAGI Phaseout Range | 2026 MAGI Phaseout Range |
|---|---|---|
| Single/HOH | $79,000 to $89,000 | $81,000 to $91,000 |
| Married Filing Jointly | $126,000 to $146,000 | $129,000 to $149,000 |
| Married Filing Separately | $0 to $10,000 | $0 to $10,000 |
Suppose your spouse wants to deduct Traditional IRA contributions and is not an active participant in a workplace retirement plan, but you are. In that case, the household MAGI phaseout range for 2026 is between $242,000 and $252,000.
Changes to SIMPLE Retirement Plan Contributions
Regarding changes to SIMPLE IRAs, there will be two different sets of contribution limits depending on the size of the business. For businesses with 100 or fewer employees, starting in 2026, the amount individuals can contribute to their SIMPLE retirement accounts increased to $17,000, up from $16,500 in 2025. Individuals age 50 and older will be eligible for catch-up contributions of $4,000, up from $3,500 in 2025.
For businesses with fewer than 26 employees who sponsor a SIMPLE IRA plan, the maximum employee contribution will increase to $18,100, up from $17,600 in 2025. Employees eligible for catch-up contributions will be able to contribute $3,850; this limit remains unchanged from 2025. The higher catch-up contribution limit for employees between the ages of 60 and 63 will remain at $5,250.
Limits for various retirement plans typically change every year. Before we reach 2026, review your monthly contribution rate to these plans and ensure that you adjust it on January 1st to account for the increased limits. You also want to ensure that you don’t overcontribute, as this may subject you to a penalty on the amount contributed over the limits. The penalty will vary depending on the type of retirement plan. Please consult a financial professional with any questions about these changes before making any adjustments.