2026 IRS Updated Retirement Contribution Limits & Caps

November 20, 2026

The IRS has updated retirement contribution limits for 2026. These changes offer new opportunities and considerations as you plan for the future.

Here’s a breakdown of the new limits:

1. 401(k) and Roth 401(k) Contributions

For 2026, the contribution limit for traditional 401(k) and Roth 401(k) accounts has increased:

• Under Age 50
  The employee contribution cap is now $24,500, which has increased from $23,500 in 2025.

• Age 50 and Over (Standard Catch-Up Contributions)
  Individuals 50 and older can contribute an extra $8,000, up from $7,500 in 2025, for a combined total of $32,500 in 2026.

• Ages 60 to 63: “Super Catch-Up” Contributions
  For individuals aged 60 to 63, the higher “super catch-up” contribution created by the SECURE Act 2.0 remains in place for 2026 at $11,250 (instead of the standard $8,000 catch-up contribution).

Many plans still need to be amended to accommodate the age-60–63 super catch-up provision, so if you are in this age window, it is essential to confirm with your plan administrator that your plan has been updated to reflect this change.

2.  SIMPLE IRA Contributions

For those with a SIMPLE IRA, contribution limits for 2026 have been adjusted as follows:

• Under Age 50
  The contribution cap has increased to $17,000, up from $16,500 in 2025.
  
  

• Age 50 and Over (Standard Catch-Up Contributions)
  Those 50 and older can make an additional SIMPLE catch-up contribution of $4,000, up from $3,500 in 2025.

• Ages 60 to 63: SIMPLE “Super Catch-Up”
  If your SIMPLE plan has adopted the SECURE 2.0 enhancement for ages 60–63, the higher SIMPLE catch-up contribution for 2026 is $5,250.
  
  

3. IRA and Roth IRA Contributions.

For traditional and Roth IRAs, the contribution limits will increase for 2026.

• Under Age 50: The annual limit is $7,500, up from $7,000.
  
  

• Age 50 and Over (Catch-Up Contributions): The additional catch-up amount is $1,100, up from $1,000 in 2025, for a total of $8,600 if you are 50 or older.
  
  

Even with relatively small dollar increases, IRAs continue to offer meaningful tax advantages and should remain a core part of a comprehensive retirement strategy.

4. 401(k) / Profit Sharing Plan Contribution Limits (Overall Limit)

• The combined limit on annual additions to a participant’s account in a defined contribution plan (including employee deferrals, employer contributions, and forfeitures) under Internal Revenue Code §415(c) is $72,000 for 2026, up from $70,000 in 2025.

This cap is important for business owners and high earners who use profit-sharing and discretionary employer contributions along with salary deferrals.

5. Profit-Sharing / Safe Harbor / Matching – Maximum

• The maximum compensation considered for profit-sharing, safe harbor, and matching contributions has increased to $360,000 for 2026, up from $350,000 in 2025.50,000 in 2025.

This compensation cap determines contributions for higher-earning owners and associates in qualified plans.

6. Wages for Dependent Children

This strategy is tied to the standard deduction, which is the set amount of income that is not subject to federal tax. Therefore, the amount of wages that can be paid to a dependent child before federal tax is due changes when the standard deduction for single filers changes.

• For 2026, the standard deduction for single filers rises to $16,100, up from $ 15,850.
  
  

You can generally pay a minor child in the practice up to $16,100 of earned income in 2026 before they owe federal income tax. This assumes no other income and that the usual dependent rules apply. Having earned income makes children eligible for a Roth IRA, which can be used to pay for college.

The AGI limits for directly contributing to a Roth IRA have also been raised for 2026.

For 2026 Roth IRAs:

Single Filers:

• Full Roth contribution allowed if your modified AGI (MAGI) is below $153,000.
  
  
• The phase-out range runs from $153,000 to $168,000.
  
  
• No direct Roth contribution allowed once MAGI is $168,000 or higher.
  
  
• The upper end of the phase-out range increased from $165,000 in 2025 to $168,000 in 2026.
  
  

Married Filing Jointly:

• Full Roth contribution allowed if MAGI is below $242,000.
  
  
• The phase-out range runs from $242,000 to $252,000.
  
  
• No direct Roth contribution allowed once MAGI is $252,000 or higher.
  
  
• The upper end of the phase-out range increased from $246,000 in 2025 to $252,000 in 2026.
  
  

If your income exceeds these thresholds, you may still be able to fund a Roth IRA through a “backdoor Roth” strategy using non-deductible traditional IRA contributions followed by Roth conversion.

These updated limits create more ways to boost your retirement savings in 2026. Making catch-up contributions, leveraging age 60–63 super catch-up windows, maximizing SIMPLE IRA deferrals, or optimizing profit-sharing and Roth strategies can help you make informed decisions.

Not sure where to start? Contact us today!

References

Internal Revenue Service. (2025). 401(k) limit increases to $24,500 for 2026; IRA limit increases to $7,500 (IR-2025-111). U.S. Department of the Treasury. https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500.

Internal Revenue Service. (2025). Notice 2025-67: Cost-of-living adjustments for 2026. U.S. Department of the Treasury. https://www.irs.gov/pub/irs-drop/n-25-67.pdf

Accounting Today. (2025). IRS ups limits for 401(k) and IRA contributions in 2026. https://www.accountingtoday.com.

Fidelity Investments. (2025). Roth IRA income limits for 2026. https://www.fidelity.com.

NerdWallet. (2025). Roth IRA contribution and income limits for 2026. https://www.nerdwallet.com.

Barron’s. (2025). Roth IRA phase-out ranges rise for 2026. https://www.barrons.com.

Congressional Budget Office. (2025). Standard deduction inflation adjustments for tax year 2026. https://www.cbo.gov.