IRS Announces 2026 Retirement Plan Hikes: 401(k) Limits Climb to $24,500

The Internal Revenue Service has announced new, higher contribution limits for retirement accounts. These changes will take effect for the 2026 tax year. Millions of American workers will be able to save more money for their future.

The adjustments are part of the IRS’s annual cost-of-living updates. This move is designed to help retirement savings keep pace with inflation.

Breaking Down the New Savings Limits

The annual limit for 401(k), 403(b), and most 457 plans is rising by $1,000. It will increase from $23,500 in 2025 to $24,500 in 2026. This gives savers more room to grow their nest eggs tax-free.

For workers aged 50 and over, catch-up contributions are also increasing. This limit will rise to $8,000, up from the current $7,500. The special “super catch-up” limit for those aged 60-63 remains at $11,250. According to Reuters, these changes are mandated by the SECURE 2.0 Act.

Individual Retirement Accounts (IRAs) are also seeing a boost. The annual contribution limit for IRAs will rise to $7,500. The catch-up contribution for those 50 and older will be $1,100.

A Critical Boost for Retirement Security

These increases come at a crucial time for American savers. Research from Vanguard, cited by CBS News, shows a concerning trend. Only 4 out of 10 working Americans feel they are on track to maintain their lifestyle in retirement.

However, experts note a gap between the opportunity and reality. Data indicates only about 14% of savers maxed out their 401(k) contributions in 2024. The new limits offer a renewed chance for those with the financial capacity to save more.

The updated 401(k) contribution limits for 2026 provide a significant opportunity for workers to enhance their long-term financial security. Taking full advantage of these higher limits can make a substantial difference in retirement.

Info at your fingertips

What is the new 401(k) limit for 2026?

The new limit is $24,500. This is an increase of $1,000 from the 2025 limit of $23,500.

How much can I contribute to my IRA in 2026?

The IRA contribution limit is rising to $7,500. The catch-up limit for those 50 and over will be $1,100.

What are the catch-up contribution limits?

For 401(k) plans, the standard catch-up is $8,000 for those 50+. A special $11,250 “super catch-up” remains for savers aged 60 to 63.

Why are the retirement limits increasing?

The IRS makes annual cost-of-living adjustments. These increases are intended to help savings keep pace with inflation.

Do all employers allow catch-up contributions?

Not all employers permit catch-up contributions. Employees should check with their HR department or plan administrator for specific plan rules.

Trusted Sources

Internal Revenue Service (IRS), Reuters, CBS News