IRS Contribution Limits 2026: Updated Rules and What Changed from 2025

The IRS contribution limits for 2026 have increased, updating the amount employees may contribute to workplace retirement plans. These changes affect 401(k) plans, 403(b) accounts, defined contribution plans, IRAs, and other retirement plans used by millions of workers. The adjustments reflect annual cost-of-living calculations under SECURE 2.0 and apply to the current tax year.

Contribution Limit Changes for 401(k) Plans and 403(b) Accounts

The annual elective deferral limit for employees participating in 401(k) plans, 403(b) plans, governmental 457 plans, and the Thrift Savings Plan increases to $24,500 in 2026, up from $23,500 in 2025. This limit applies to elective deferrals made through payroll and helps employees reduce taxable income during the calendar year.

The annual contribution limit for defined contribution plans — covering the combined total of employee contributions, employer contributions, Roth contributions, and any additional qualified plan funds — increases to $72,000 in 2026, up from $70,000 in 2025. A compensation limit of $360,000 applies when plan administrators calculate matching or employer contributions for each participant in 2026, up from $350,000 in 2025.

Catch-Up Contributions for Age 50 and Older

Standard and SECURE 2.0 Catch-Up Rules

Workers aged 50 and older may take advantage of an increased catch-up contribution limit of $8,000 for 2026 for 401(k), 403(b), governmental 457 plans, and the Thrift Savings Plan, up from $7,500 in 2025. These catch-up contributions allow employees to exceed the standard annual contribution limit and save more during the tax year.

SECURE 2.0 provides an expanded catch-up option for individuals ages 60 to 63. For both 2025 and 2026, the enhanced catch-up limit for 401(k) and similar plans is $11,250 for participants in this age group — higher than the standard $8,000 catch-up that applies to those 50 and older.

For SIMPLE IRA plans, catch-up rules differ. In 2025, the standard catch-up for participants aged 50 and older is $3,500, and the enhanced catch-up for those ages 60 to 63 is $5,250. In 2026, the SIMPLE IRA catch-up increases to $4,000 for most plans, while the catch-up for ages 60–63 remains $5,250. Workers at smaller employers (25 or fewer employees) may be subject to different limits under SECURE 2.0 rules; plan administrators can confirm which limits apply.

IRA Contributions, Roth IRAs, and Filing Status Adjustments

IRA contributions increase to $7,500 for 2026, up from $7,000 in 2025. The catch-up contribution for those age 50 and older also increases to $1,100 in 2026, up from $1,000 in 2025. Roth IRAs maintain the same annual contribution cap as traditional IRAs; however, eligibility to contribute phases out based on modified adjusted gross income and filing status. For 2026, the Roth IRA phase-out range is $153,000–$168,000 for single filers and heads of household, and $242,000–$252,000 for married couples filing jointly. These phaseout ranges increased from 2025.

For additional context on legislative changes that affect IRA contributions, see our related coverage.

Individuals who contribute to both an IRA and a workplace retirement plan must carefully track their annual contributions to ensure compliance with tax regulations. Excess deferrals can occur if contributions across different employers exceed the deferral limit. Participants should monitor account activity, earned income, and plan rules to ensure contributions do not exceed the applicable limits for their retirement plans.

Compensation Limit and Elective Deferrals Across Different Employers

The compensation limit determines the maximum amount of pay that employers may consider when calculating contributions to a participant's account under a qualified plan. Workers employed by different employers must monitor elective deferrals to prevent excess contributions. Plan administrators may guide participants on how contributions are treated, but they cannot provide legal or tax advice.

Understanding the rules on compensation, earnings, distribution timing, and contribution limits helps prevent issues with total annual contributions. Highly compensated employee classifications may also apply, depending on income and participation levels.

Impact on Retirement Savings for Employees

The updated contribution limits give employees additional opportunities to invest in accounts that grow tax-deferred or tax-free, depending on the account type. Workers using a workplace retirement plan should adjust their elective deferrals early in the calendar year to align with the new 2026 limits. Roth contributions, traditional IRA contributions, and other annual contributions should be reviewed to ensure compliance and to avoid excess contributions.

Employees eligible for the retirement savings contributions credit (the Saver's Credit) may benefit from reviewing the updated 2026 income thresholds, which have also increased. Reviewing income, filing status, and plan documents helps ensure that contributions remain within limits and that participants do not exceed the rules that apply to each account type.

Workers uncertain about these updates may consult a financial planning professional who can explain general options without providing legal or tax advice. Staying informed about limits, earnings, and plan requirements helps participants contribute the maximum allowable amount and manage retirement funds effectively.

Sources

• IRS Notice 2025-67 (primary authority for 2026 limits)
• IRS Notice 2024-80 (primary authority for 2025 limits)
• IRS COLA Increases for Dollar Limitations on Benefits and Contributions
• IRS Newsroom: 401(k) limit increases to $24,500 for 2026‍

By William Mc Lee, Editor-in-Chief & Tax Expert—Get Tax Relief Now