If you are saving for retirement through a workplace plan or IRA, the IRS just gave you a little more room to save in 2026.
The agency announced that the 401(k) limit increases to $24,500 for 2026, and the IRA contribution limit increases to $7,500. These changes are part of the regular cost of living adjustments the IRS makes each year for retirement plans.
You can read the full technical details in the IRS newsroom release, 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500, and the supporting cost of living notice, Notice 2025-67.
For most people, the practical message is simple: if your budget allows, you can put more into tax advantaged retirement accounts in 2026 than you could in 2025.
Key new limits for 2026
Here are the headline numbers from the IRS announcement.
Workplace plans
These limits apply to 401(k), 403(b), most governmental 457 plans and the federal Thrift Savings Plan:
- Employee contribution limit: $24,500 in 2026, up from $23,500 in 2025
- Standard catch up for age 50 and older: $8,000, up from $7,500
- Special catch up for ages 60 to 63: $11,250 (this higher Secure 2.0 amount stays the same as in 2025)
So if you are 50 or older, you may be able to contribute up to $32,500 to your workplace plan in 2026, depending on your plan rules.
IRAs
For Individual Retirement Arrangements, the IRS announcement notes:
- Annual IRA contribution limit: $7,500 in 2026, up from $7,000 in 2025
- Catch up contribution for age 50 and older: $1,100, up from $1,000
That means someone 50 or older can put up to $8,600 into an IRA in 2026, subject to the usual income and coverage rules for traditional and Roth IRAs. For general background on IRA limits, see the IRS page on IRA contribution limits.
SIMPLE and other plans
The IRS notice also raises limits for SIMPLE plans and updates many technical thresholds, including:
- SIMPLE contribution limit increased to $17,000 in 2026, with a higher amount of $18,100 for certain SIMPLE plans
- SIMPLE catch up limit for most age 50 and older participants increased to $4,000
Additional details are in Notice 2025-67 and in IRS summaries of contribution topics for retirement plans.
What this means if you save through a 401(k) or similar plan
If you contribute to a 401(k), 403(b), governmental 457 plan or the Thrift Savings Plan, the higher 401(k) limit of $24,500 for 2026 gives you an opportunity to:
- Increase your deferrals a bit and keep the same take home pay by pairing the change with raises or bonus timing
- Use the higher catch up limits if you are 50 or older and want to boost savings in the years leading up to retirement
The IRS keeps a general overview page for these plans at 401(k) and profit sharing plan contribution limits, which is helpful context, even though it may not yet show the brand new 2026 numbers.
If you are not currently maxing out your plan, you do not have to jump all the way to the new limits. Even a small increase in your per paycheck contribution can make a meaningful difference over time.
What the new IRA limit means for you
For 2026, the IRA contribution limit rises to $7,500, and the age 50 and older catch up amount becomes $1,100. That creates a combined limit of $8,600 for eligible older savers.
A few important reminders:
- The combined limit applies across all of your traditional and Roth IRAs
- Your ability to deduct a traditional IRA contribution or contribute to a Roth IRA depends on your income and whether you or your spouse are covered by a workplace plan
- The IRS newsroom article notes that the income phase out ranges for traditional IRA deductions, Roth IRA contributions and the Saver’s Credit all increase for 2026, which generally makes it a bit easier for some taxpayers to qualify
The full ranges are spelled out in Notice 2025-67 and on relevant IRS retirement topics pages. The question for you is not just what the limits are, but which mix of accounts makes sense for your tax situation.
Saver’s Credit and SIMPLE plans
The IRS announcement also includes updated income limits for the Saver’s Credit, which is a credit for low and moderate income taxpayers who contribute to retirement accounts. For 2026, the top income limit rises to $80,500 for married filing jointly and lower amounts for other filing statuses.
If you sponsor or participate in a SIMPLE IRA or SIMPLE 401(k), the higher contribution and catch up limits for 2026 may let you put more away in those plans as well. For general rules, the IRS maintains a page on SIMPLE IRA contribution limits.
How to use these new limits wisely
Higher limits are helpful, but they are only useful if you have a strategy. Some practical questions to consider:
- Should you increase your 401(k) contributions or prioritize paying down debt first
- Does a Roth option make sense given your current and expected future tax rates
- If you are 50 or older, how can you structure catch up contributions across 401(k) and IRAs in a tax efficient way
- Are you taking full advantage of employer matching contributions
These decisions should fit into a broader retirement and tax plan. The IRS publishes the numbers. The real planning happens when you decide how to apply them to your specific situation.
How Torkelson & Associates CPAs can help
Keeping up with new retirement limits is only part of the picture. The real goal is to make sure your 401(k), IRA and other savings work together to support the retirement you want.
At Torkelson & Associates CPAs, we can help you:
- Interpret how the 401(k) limit increases to $24,500 for 2026 fits into your current savings plan
- Coordinate contributions across 401(k), IRA, SIMPLE and other accounts
- Understand how the updated income ranges for IRA deductions, Roth contributions and the Saver’s Credit affect you
- Build or refine a retirement funding strategy that considers taxes today and in retirement
If you would like to review your 2026 retirement contribution strategy before the year starts, please contact us. We can walk through the new limits with you and help you decide what adjustments, if any, make sense.