The IRS is increasing the 401(k), 2026 IRA contribution limit
If you’re planning to save more for retirement in 2026, you’re in luck: The IRS just announced higher limits on 401(k) retirement accounts.
The IRS resets the retirement account contribution limit each year and recovers from bankruptcy. By 2026, most workers will be able to save up to $24,500 in 401(k)s, not including employer matching contributions.
Although inflation has been revised downwards to 9.1% in 2022, inflation remains high.
The most recent consumer price index (CPI), the most watched benchmark metric for money (the IRS uses the CPI for (The 12-month period ends in September as the basis for its calculations.)
While high inflation hurts consumers and American households, it also means higher contribution limits and larger cost adjustments (cola) for social security beneficiaries.
401(k) contribution limits in 2026
As defined benefit pensions have become standard retirement plans, defined benefit plans such as 401(k)s have become a retirement savings vehicle, especially if you work in the private sector.
A 401(k) is an employer-sponsored retirement plan that allows you to contribute pre-tax dollars from your paycheck. This has the advantage of lowering your taxable income while increasing the amount of money that can be reinvested and grown over time.
Usually, you don’t pay taxes on 401s. Since there’s a good chance your income will decrease when you leave the workforce, you may be lower tax bracketwhich can reduce your future tax obligations.
The IRS increases the contribution limit (k) by $1,000 in 2026, increasing at $24,500 from its current $23,500. Donation Deadline is Del. 31, so if you’re aiming to beat this year’s number, you still have a month and a half to do so.
Employees age 50 and older have additional opportunities to save with “Catch-up” retirement account contributions. For those ages 50 to 59, the IRS proposed a maximum contribution amount to $8,000 in 2026, up from $7,500 this year. This means that these workers will be able to contribute a total of $32,500 in 2026.
Additional changes to help older Americans save more for retirement were introduced by the Secured Act 2.0 and went into effect last year. Because of the “spectacular” provision, workers aged 60 to 63 are allowed to contribute $11,250 instead of $8,000 this year. That number will remain the same through 2026, so workers ages 60 to 63 will be able to recover up to $35,750 the following year.
These 401 contribution limits
IRA Contribution Limits for 2026
On Thursday, the IRS also announced 2026 contribution limits for traditional retirement accounts (IRAs). As the name suggests, IRAS are not tied to any retirement benefits your employer may offer, but traditional IRAs are. Tax-deferred like 401(k)s, both contributions and earnings are tax-deductible when withdrawn in retirement.
The 2026 IRA contribution limit is $7,500, an an increase of $500. This is the first increase in two years; Last year, the IRS kept the 2024 limit at $7,000.
For employees 50 and over, tYou are protected by the 2.0 act and we have added an annual cola to the limit of IRA Catch-up contributions. For 2026, the IRS Raised it to $1,100, from $1,000 to 2025.
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