IRS Boosts 401(k) Contribution Limit to $24,500; IRA Limit to $7,500
The IRS has announced that employees participating in 401(k), 403(b), most 457 plans, and the federal Thrift Savings Plan will see their annual contribution limit rise to $24,500 in 2026, up from $23,500 in 2025. The adjustment stems from this year’s third-quarter inflation rate of 4.26%, which the IRS rounds down to the nearest $500 increment.
Workers aged 50 and older will also benefit from higher catch-up allowances. The catch-up contribution limit for defined contribution plans will rise to $8,000, increasing the maximum allowed annual contribution to $32,500. The SECURE 2.0 Act’s “super catch-up” provision—available to individuals ages 60 through 63—remains unchanged at $11,250 for 2026.
IRA savers will likewise see increased capacity. The annual IRA contribution limit will move from $7,000 to $7,500, while the catch-up contribution for those 50 and older will rise to $1,100, reflecting SECURE 2.0’s requirement that IRA catchups receive annual cost-of-living adjustments.
The IRS also adjusted income phase-out ranges for both traditional and Roth IRAs. For single filers in workplace plans, traditional IRA eligibility will phase out between $81,000 and $91,000, while married couples will see the range rise to $129,000 to $149,000. Roth IRA phase-outs will increase to $153,000–$168,000 for singles and $242,000–$252,000 for joint filers.
Low- and moderate-income workers will gain expanded access to the Saver’s Credit, with income limits rising to $80,500 for joint filers, $60,375 for heads of household, and $40,250 for single filers. SIMPLE retirement plans will also receive higher limits, with contributions increasing to $17,000, or $18,100 for applicable enhanced SIMPLE plans under SECURE 2.0. Catch-up limits for SIMPLE plans will rise to $4,000 for most participants, while expanded catchups for workers ages 60–63 will remain at $5,250.
The minimum compensation threshold to qualify as a highly compensated employee will hold steady at $160,000.