2026 IRA and 401(k) Contribution Limit Increases – Here’s What to Know

Next year is just around the corner, and there’s good news for your retirement savings. The SECURE 2.0 Act and routine inflation adjustments mean bigger contribution limits for both IRAs and employer-sponsored plans in 2026. 

That means more room to save with tax advantages. Here’s what to know.

What’s Changing

Here are the highlights:

• The base employer salary-deferral limit for 401(k)s, 403(b)s, and most 457(b) plans will increase to $24,500, up from $23,500 in 2025
• Catch-up contributions for age 50+ in those plans will increase to $8,000 (from $7,500). Age 60-63 and eligible remain unchanged at $11,250
• The limit for an Individial Retirement Account (IRA) increases up to $7,500 (from $7,000). Catch-up for age 50+ goes to $1,100.
• Additional income and phase-out ranges are also shifting: for example, Roth IRA eligibility income and deduction phase-outs for traditional IRAs have increased (more details in the next section)
• Defined contribution plan total annual contributions (employee + employer) jump from $70,000 to $72,000. This includes Solo 401(k) and SEP IRAs.

What are the IRA Income and Phase-Out Ranges?

For 2026, the IRS is giving everyone more breathing room with higher income limits for retirement accounts. Roth IRA will start phasing out at $161,000 for single filers and $240,000 for married couples filing jointly, fully cutting off at $176,000 and $260,000. 

Traditional IRAs are getting similar updates: if you have a workplace plan like a 401(k), your deduction begins to phase out between $78,000 and $88,000 (single) or $124,000 and $144,000 (MFJ). And if your spouse is the one covered by a workplace plan, but you aren’t, your deduction phases out between $230-$250K. Basically, 2026 gives higher earners a bit more room to contribute or deduct, thanks to routine inflation adjustments.

Why This Matters

These new 2026 contribution limits give you more room to breathe and more room to grow your money. Higher caps mean you can sock away more into tax-advantaged accounts, which gives compounding more time to work quietly and diligently in the background. 

And if you’re someone who got a late start on retirement savings (which is… a lot of people), these increases are a real chance to catch up faster. It also makes decisions like Roth vs Traditional even more important, especially with Secure 2.0 rolling out changes that impact higher earners and catch-up contributions.

If your employer offers a match, the higher combined limits mean the total amount you and your employer can save together just got bigger. All this adds up to one thing: more flexibility and more potential growth if you take advantage of it (you should!)

What You Should Do Now

Review your current contribution: Now’s a good time to look at your current contribution rate. If you weren’t maxing it out before, now’s the time to decide whether you can increase, even if it’s a little.

Review your workplace options: Are you able to contribute to a Roth 401(k)? Can your plan accept contributions up to the new limits, since not all do?

50+ catch-ups: If you’re 50 or older, prioritize the catch-up contributions. Since those limits just increased, this will mean more tax-advantaged space to grow your money

Revisit Roth vs Traditional strategy: With Secure 2.0 requiring some high-earner catch-ups to be Roth, your tax planning might need a refresh.

Update budgeting if needed: Saving more might mean adjusting spending elsewhere, whether it’s travel, lifestyle upgrades, or side-hustle income.

Things to Watch Out For

• Just because the limit went up doesn’t mean you have to max out everything right away. Make sure your emergency fund, debt, and other priorities are covered first
• Higher limits don’t automatically mean your specific plan supports all the features, like after-tax contributions or the maximum catch-up options
• Keep an eye on IRS updates and employee notices. Some Secure 2.0 changes are still rolling out, and it may take time for plans to adapt
• Increasing your retirement contributions means less take-home pay today. If your cash flow is tight, easing into higher contributions might make more sense

The Money Move

The 2026 retirement account changes give you more room to save and more room to plan. Whether you’re just getting started, hitting your stride, or trying to make up for lost time, those higher limits are a solid opportunity. Use them intentionally, adjust contributions where you can, choose the right account type for your tax future, and make sure it all still fits in your overall financial goals.

Your future self will be happy you planned ahead!

Read more:

Roth vs. Traditional IRA: Everything You Need to Know
Solo 401(k) vs SEP IRA: What’s the Difference?