401(k) and IRA Contribution Limits to Rise in 2026

The IRS unveiled contribution limit changes for popular retirement plans, including 401(k) plans and IRAs.

Americans who contribute to 401(k) and 403(b) plans, as well as governmental 457 plans and the federal government’s Thrift Savings Plan, will see their contribution limit rise to $24,500 in 2026 – an increase from $23,500 in 2025 – the IRS announced in November.

The IRA contribution limit is also rising in the new year, increasing to $7,500 in 2026 from $7,000 in 2025.

Peopel aged 50 and up who are looking to ramp up their retirement savings through the use of catch-up contributions to IRAs will be able to contribute an extra $1,100 to their IRA starting in 2026 – up from an additional $1,000 in 2025. That change came about due to a provision of the SECURE 2.0 Act requiring an annual cost-of-living adjustment.

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savers putting money into retirement accounts will generally see higher limits in 2026. (iStock)

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IRS Announces Increased retirement Plan Contribution Limits for 2026

The Internal Revenue service (IRS) has announced significant increases to retirement plan contribution limits for 2026, offering individuals more opportunities to save for their future. These adjustments, designed to help Americans prepare for longer and more expensive retirements, impact 401(k)s, IRAs, and other retirement savings vehicles.

Key Changes to Retirement Plan Limits for 2026

Here’s a breakdown of the updated limits:

• 401(k) Contribution Limit: The employee contribution limit for 401(k), 403(b), and most 457 plans will rise to $23,000, a $1,000 increase from the 2024 limit of $22,000. IRS Proclamation
• 401(k) Catch-Up Contribution Limit: For those age 60 and over, the catch-up contribution limit will increase to $7,500, up from $7,500 in 2024. IRS Announcement
• Total 401(k) Contribution Limit (Employee + Employer): The combined employee and employer contribution limit for 401(k) plans will be $69,000, a $1,000 increase from the 2024 limit of $68,000. IRS Announcement
• IRA Contribution Limit: The contribution limit for both Traditional and Roth IRAs will increase to $7,000, up from $7,000 in 2024. IRS Announcement
• IRA Catch-Up Contribution Limit: Individuals age 50 and over can contribute an additional $1,000, bringing their total IRA contribution limit to $8,000.IRS Announcement

Why are these increases important?

These increased limits are particularly beneficial in the current economic climate. With rising costs of living and increasing longevity, individuals need to save more to ensure a comfortable retirement. The higher contribution limits allow for greater potential tax-advantaged savings growth.

Expert Insights

Lisa Featherngill, national director of strategic wealth and business advisory at Comerica Wealth Management, emphasized the importance of these changes, stating that the “new 2026 retirement plan limits give people more room to save, which is especially helpful as retirement gets longer and more expensive.”

Who Benefits from these Changes?

the increased limits benefit a wide range of savers:

• Younger Workers: Can take advantage of the higher limits to start building a substantial retirement nest egg early in their careers.
• Mid-Career Savers: Can accelerate their savings to catch up if thay are behind on their retirement goals.
• Older Workers: The increased catch-up contribution limits provide a valuable prospect to boost savings in the years leading up to retirement.
• High-Income Earners: May be able to contribute more to tax-advantaged retirement accounts, reducing their overall tax burden.

Key Takeaways

• The IRS has increased retirement plan contribution limits for 2026.
• 401(k) contribution limits are rising to $23,000, with a $7,500 catch-up contribution for those 60 and over.
• IRA contribution limits are increasing to $7,000, with an $8,000 limit for those 50 and over.
• These changes provide individuals with more opportunities to save for a secure retirement.

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