IRS Increases 401(k), IRA Contribution Limits for 2026

If you’re looking to ramp up your retirement savings in 2026, you’re in for some good news. The IRS has just announced an increase in contribution limits for 401(k)s and other retirement accounts for the upcoming year.

Every year, the IRS reviews and adjusts retirement account contribution limits to account for inflation. For 2026, most workers will be able to save up to $24,500 in their 401(k)s, excluding any employer matching contributions.

Despite a recent slowdown in price increases from the peak of 9.1% in 2022, inflation remains elevated. The most recent consumer price index (CPI) reported a 3% inflation rate on a year-over-year basis, exceeding the Federal Reserve’s 2% long-term target. This higher inflation rate translates to increased contribution thresholds and a higher cost-of-living adjustment (COLA) for Social Security beneficiaries.

401(k) Contribution Limits for 2026

Defined-contribution retirement plans like 401(k)s have become the primary retirement savings vehicle as defined-benefit pensions have become less common, especially in the private sector. A 401(k) allows you to contribute pre-tax dollars from your earnings, reducing your taxable income while maximizing your investment potential over time. Taxes on contributions and earnings are deferred until retirement, when you’re likely to be in a lower tax bracket.

The IRS has raised the 401(k) contribution limit to $24,500 for 2026, up $1,000 from the current limit of $23,500. Workers aged 50 and above can make additional “catch-up” contributions, with the limit increasing to $8,000 for 2026 from $7,500 this year. The SECURE 2.0 Act introduced a “super catch-up” provision allowing workers aged 60 to 63 to contribute up to $11,250, up from $8,000. This means older workers can save up to $35,750 in 2026.

These contribution limits also apply to other employer-sponsored retirement plans like 403(b)s, government 457 plans, and the federal government’s Thrift Savings Plan.

IRA Contribution Limits for 2026

The IRS has also announced the 2026 contribution limits for traditional individual retirement accounts (IRAs). Traditional IRAs are tax-deferred like 401(k)s, with contributions and earnings taxed only upon withdrawal in retirement. The 2026 IRA contribution limit has been increased to $7,500, a $500 raise from the previous limit of $7,000.

For workers aged 50 and above, the SECURE 2.0 Act has raised the annual COLA for IRA catch-up contributions to $1,100 for 2026, up from $1,000 in 2025.

In conclusion, the higher contribution limits for 401(k)s and IRAs in 2026 provide an excellent opportunity for individuals to boost their retirement savings and secure their financial future. Consider taking advantage of these increased limits to maximize your retirement nest egg.