Centerline Wealth Advisors

Fiduciary Financial Planning in Louisville, KY

IRS Announces 2026 Contribution Limits for 401(k) and IRA Accounts

IRS 2026 Contribution Limits for 401(k) and IRA

 

IRS Announces 2026 Contribution Limits for 401(k) and IRA Accounts

The Internal Revenue Service (IRS) revealed on Thursday that the maximum amount individuals can contribute to their 401(k) plans in 2026 will increase to $24,500, up from $23,500 in 2025.

Alongside this, the IRS published detailed guidance on cost-of-living adjustments impacting pension plans and other retirement-related limits for the 2026 tax year in Notice 2025-67, now available on IRS.gov.

Key Updates for 2026

  • The annual contribution cap for employees participating in 401(k), 403(b), governmental 457 plans, and the federal Thrift Savings Plan rises to $24,500, compared to $23,500 in 2025.
  • The annual IRA contribution limit increases to $7,500 from $7,000.
  • Under the Secure 2.0 Act of 2022, the IRA catch-up contribution limit for individuals aged 50 and older, which now includes an annual cost-of-living adjustment, is raised to $1,100 from $1,000.
  • The catch-up contribution limit for employees aged 50 and above participating in most 401(k), 403(b), governmental 457 plans, and the Thrift Savings Plan increases to $8,000, up from $7,500.
  • Consequently, participants aged 50 and older in these plans can contribute up to $32,500 annually starting in 2026.
  • Additionally, Secure 2.0 introduced a higher catch-up contribution limit for employees aged 60 to 63, which remains at $11,250 for 2026, compared to $8,000 for other catch-up eligible workers.

Income Thresholds for IRAs and Roth IRAs

The income limits determining eligibility for deductible traditional IRA contributions, Roth IRA contributions, and the Saver’s Credit have all been raised for 2026:

  • For single taxpayers covered by a workplace retirement plan, the phase-out range is now $81,000 to $91,000, up from $79,000 to $89,000.
  • Married couples filing jointly, where the contributing spouse is covered by a workplace plan, have a phase-out range of $129,000 to $149,000, increased from $126,000 to $146,000.
  • For IRA contributors not covered by a workplace plan but married to someone who is, the range rises to $242,000 to $252,000, up from $236,000 to $246,000.
  • Married individuals filing separately who are covered by a workplace plan continue to have a phase-out range of $0 to $10,000, with no adjustment.

Roth IRA Income Phase-Outs

  • Singles and heads of household see their phase-out range increase to $153,000 to $168,000, from $150,000 to $165,000.
  • Married filing jointly couples have a range of $242,000 to $252,000, up from $236,000 to $246,000.
  • Married filing separately individuals remain at $0 to $10,000, unchanged.

Saver’s Credit Income Limits

  • Married couples filing jointly: $80,500 (up from $79,000)
  • Heads of household: $60,375 (up from $59,250)
  • Singles and married filing separately: $40,250 (up from $39,500)

SIMPLE Retirement Accounts

  • Contribution limits increase to $17,000 from $16,500.
  • Due to Secure 2.0 provisions, certain SIMPLE plans allow higher contributions, with the 2026 limit rising to $18,100 from $17,600.
  • The catch-up contribution limit for employees aged 50 and over in most SIMPLE plans increases to $4,000 from $3,500.
  • For certain applicable SIMPLE plans, the catch-up limit remains $3,850, while employees aged 60 to 63 retain a higher catch-up limit of $5,250.

Check out more of Centerline’s news and insights here. And come back next year to learn about the IRS 2027 Contribution Limits.

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