Retirement savers received welcome news this month as the Internal Revenue Service announced increased contribution limits for 401(k) plans and IRAs in 2026. The adjustments, which reflect cost-of-living increases, offer workers an opportunity to shelter more income from taxes while building their nest eggs.

The New Numbers for 2026

Starting January 1, 2026, employees can contribute up to $24,500 to their 401(k) plans—a $1,000 increase from the 2025 limit of $23,500. When combined with employer contributions, the total annual limit rises to $72,000, up from $70,000 in 2025.

Here's a breakdown of the key changes:

Employee Contribution Limits

  • Standard 401(k) limit: $24,500 (up from $23,500)
  • Age 50+ catch-up: $8,000 (up from $7,500)
  • Ages 60-63 "super" catch-up: $11,250 (unchanged)
  • Total possible for 50+: $32,500
  • Total possible for ages 60-63: $35,750

IRA Limits

  • Standard IRA contribution: $7,500 (up from $7,000)
  • Age 50+ catch-up: $1,100 (up from $1,000)
  • Total possible for 50+: $8,600

SECURE 2.0 Changes Taking Effect

Beyond the inflation adjustments, several SECURE 2.0 Act provisions are reshaping retirement savings in 2026:

Mandatory Roth Catch-Up Contributions

Beginning in 2026, a significant change affects high earners: those who earned more than $150,000 in FICA wages during 2025 must make their catch-up contributions on a Roth (after-tax) basis only. This means no more tax-deferred catch-up contributions for higher-income workers.

The implications are substantial:

  • If your plan doesn't offer Roth contributions, you cannot make catch-up contributions at all
  • The $150,000 threshold is indexed to the prior year's wages
  • Employers must verify wage information before allowing catch-up contributions

"This change represents a fundamental shift in how high earners approach retirement savings. While Roth contributions mean paying taxes now, the benefit is tax-free withdrawals in retirement—potentially worth far more if tax rates rise."

— Retirement planning experts

The Super Catch-Up Advantage

Workers aged 60 to 63 get a special benefit: an enhanced catch-up contribution limit of $11,250, bringing their total possible 401(k) contribution to $35,750 in 2026. This "super catch-up" provision, introduced by SECURE 2.0, provides a powerful savings boost during the final years before retirement eligibility.

Maximizing Your 2026 Retirement Savings

With the new limits announced, here's how to make the most of your retirement savings:

1. Increase Your Contribution Rate Now

If you're not already maxing out your 401(k), consider increasing your contribution percentage before year-end. Many plans allow changes to take effect immediately, giving you a head start on reaching the new limits.

2. Understand Your Roth Options

If you earn over $150,000, ensure your plan offers Roth contributions—you'll need them for catch-up contributions in 2026. If your employer doesn't offer Roth 401(k) options, it may be time to advocate for adding them.

3. Don't Forget the IRA

Even if you max out your 401(k), you can still contribute to an IRA. The Roth IRA income phase-out for single filers rises to between $153,000 and $168,000 in 2026, up from $150,000 to $165,000 in 2025.

4. Take Advantage of Employer Matches

With combined employer-employee limits rising to $72,000, ensure you're contributing enough to capture your full employer match—it's essentially free money for your retirement.

Income Phase-Out Ranges for 2026

The IRS also adjusted income thresholds for various retirement account benefits:

  • Roth IRA (single filers): $153,000-$168,000 phase-out range
  • Traditional IRA deduction (covered by workplace plan, single): $83,000-$93,000
  • Traditional IRA deduction (not covered by workplace plan, spouse is covered): $237,000-$247,000

Looking Ahead

These increased limits represent a meaningful opportunity to accelerate retirement savings. For someone maxing out their 401(k) with catch-up contributions from age 50 to 65, the higher limits could mean tens of thousands of additional dollars in tax-advantaged savings over a working career.

The combination of higher base limits and the SECURE 2.0 super catch-up provision is particularly powerful for those in their early 60s who may have fallen behind on retirement savings. With the ability to contribute $35,750 annually, these workers have an unprecedented opportunity to boost their retirement readiness.

As always, consult with a financial advisor or tax professional to understand how these changes apply to your specific situation and to develop a retirement savings strategy that aligns with your goals.