If you intend to max out your contributions to your 401(ok) or IRA subsequent yr, you’ll get to save lots of a little greater than you may this yr.
The IRS on Thursday introduced cost-of-living changes to federal contribution limits for 2026 for key retirement financial savings autos.
401(ok) contributors can be allowed to put away up to $24,500 subsequent yr, a $1,000 improve from the present restrict. The identical improve will apply to 403(b)s, governmental 457 plans, and the federal authorities’s Thrift Savings Plan.
Anyone 50 or older in these plans can save extra. Next yr the so-called “catch-up contribution” restrict rises to $8,000 from $7,500, for a whole of $32,500. But those that are ages 60, 61, 62, and 63 could save much more – up to an extra $11,250, which is identical restrict as this yr, for a whole of $35,750.
There is one other change, nevertheless, for the highest-earning older savers. Starting in 2026, if within the prior yr you made greater than $145,000 in FICA wages — that’s earnings topic to Social Security and Medicare taxes — any catch-up contributions you make will automatically be subject to income tax. So they basically can be handled as Roth 401(k) contributions.
New financial savings and earnings limits for conventional and Roth IRAs
If you’re eligible to place cash into a tax-deductible IRA or an after- tax Roth IRA, you can be allowed to save lots of up to $7,500, which is $500 greater than you may sock away this yr.
And the catch-up contribution restrict when you’re a minimum of 50 can be $1,100, up from $1,000 at this time.
The earnings thresholds to find out whether or not you’re eligible to save lots of in these IRA autos are additionally being adjusted.
Those thresholds differ based mostly each in your marital standing and whether or not or not you’re coated by a retirement financial savings plan at work. (Here are the IRS’ new income threshold breakdowns throughout these classes.)
Limits for Saver’s Credit and SIMPLE Accounts additionally change
If you’re a low- or moderate-income employee, you could be eligible for the Retirement Savings Contributions Credit, also referred to as the Saver’s Credit. It’s basically a government-provided match on a minimum of a portion of your retirement contributions to an IRA or office retirement plan. The credit score, which received’t change subsequent yr, is value up to $1,000 for single filers; and up to $2,000 for married {couples} submitting collectively.
To qualify in 2026, your earnings could not exceed $40,250 when you’re a single filer or married submitting individually, which is up $750 from this yr’s earnings restrict. If you file as head of family, your earnings is probably not greater than $60,375, up $1,125 in comparison with this yr. And it could not prime $80,500 when you’re married submitting collectively, up $1,500.
If you’re employed by a small enterprise providing a SIMPLE IRA at work and put retirement financial savings into a SIMPLE account, you could save up to $17,000 subsequent yr, up from $16,500 at this time; though for some sorts of SIMPLE accounts the contribution restrict rises to $18,100, up from $17,600.
And the catch-up contribution restrict can be elevated to $4,000 from $3,500 at the moment. Savers who’re between the ages of 60 and 63 could contribute an extra $5,250, which is identical as this yr.