John E. Chapman
Chief Executive Officer
The IRS has released the contribution and benefit limits for 2026 across qualified retirement plans, reflecting modest but meaningful increases driven by inflation adjustments and provisions under SECURE 2.0.
For employers and plan sponsors, these updates create new opportunities to help employees save more efficiently while maintaining compliance with current regulations.
Key Highlights for 2026
- 401(k), 403(b), 457, and Thrift Savings Plans:
- The elective deferral limit increases to $24,500 (up from $23,500 in 2025).
- The catch-up contribution for participants age 50 and over rises to $8,000, allowing those eligible to defer up to $32,500 in total.
Special Catch-up for Ages 60–63:
- This higher limit remains $11,250 in 2026, as it is indexed separately from other catch-up rules under SECURE 2.0.
Roth Catch-up Wage Threshold:
- Participants earning more than $150,000 in FICA wages in 2025 will be required to make catch-up contributions as Roth contributions in 2026. Please note that this is an increase from the originally announced amount of $145,000.
IRA Contributions:
- Annual IRA contribution limits increase to $7,500 (from $7,000).
- The catch-up amount for those age 50+ adjusts to $1,100.
SIMPLE Plans:
- Salary deferral limits increase to $17,000 (up from $16,500) with a catch-up contribution of $4,000. Certain SIMPLE plans may offer a higher limit under SECURE 2.0, up to $18,100.
Defined Benefit and Contribution Plans (Section 415):
- The annual benefit limit for defined benefit plans rises to $290,000, and the defined contribution plan limit increases to $72,000.
Compensation and Highly Compensated Employee Definitions:
- The maximum annual compensation limit climbs to $360,000, while the “highly compensated employee” threshold remains at $160,000.
Income Phase-Out Changes
For those evaluating eligibility for IRA deductions or Roth contributions:
- Traditional IRA (single): $81,000–$91,000
- Traditional IRA (married filing jointly): $129,000–$149,000
- Roth IRA (single): $153,000–$168,000
- Roth IRA (married filing jointly): $242,000–$252,000
The Saver’s Credit income limit also increases, to $80,500 for joint filers, $60,375 for heads of household, and $40,250 for single filers.
Additional Adjustments Under SECURE 2.0
Other notable updates include:
- Pension-linked emergency savings account limit: $2,600 (up from $2,500)
- Domestic abuse-related distribution limit: $10,500 (up from $10,300)
- Charitable distribution deduction cap: $111,000 (up from $108,000)
For plan sponsors, these changes may prompt plan document or payroll updates ahead of the new year, along with communication reminders to help employees maximize their savings potential.
A full summary of cost‑of‑living adjustments for 2026 is available in
20251121-3
