401(k), IRA contribution limits get a bump up
By Jeanne Sahadi, CNN
(CNN) — If you plan to max out your contributions to your 401(k) or IRA next year, you will get to save a little more than you could this year.
The IRS on Thursday announced cost-of-living adjustments to federal contribution limits for 2026 for key retirement savings vehicles.
401(k) participants will be allowed to put away up to $24,500 next year, a $1,000 increase from the current limit. The same increase will apply to 403(b)s, governmental 457 plans, and the federal government’s Thrift Savings Plan.
Anyone 50 or older in those plans can save more. Next year the so-called “catch-up contribution” limit rises to $8,000 from $7,500, for a total of $32,500. But those who are ages 60, 61, 62, and 63 may save even more – up to an additional $11,250, which is the same limit as this year, for a total of $35,750.
There is another change, however, for the highest-earning older savers. Starting in 2026, if in the prior year you made more than $145,000 in FICA wages — that is income subject to Social Security and Medicare taxes — any catch-up contributions you make will automatically be subject to income tax. So they essentially will be treated as Roth 401(k) contributions.
New savings and income limits for traditional and Roth IRAs
If you are eligible to put money into a tax-deductible IRA or an after- tax Roth IRA, you will be allowed to save up to $7,500, which is $500 more than you can sock away this year.
And the catch-up contribution limit if you’re at least 50 will be $1,100, up from $1,000 today.
The income thresholds to determine whether you’re eligible to save in those IRA vehicles are also being adjusted.
Those thresholds differ based both on your marital status and whether or not you’re covered by a retirement savings plan at work. (Here are the IRS’ new income threshold breakdowns across those categories.)
Limits for Saver’s Credit and SIMPLE Accounts also change
If you’re a low- or moderate-income worker, you may be eligible for the Retirement Savings Contributions Credit, also known as the Saver’s Credit. It’s essentially a government-provided match on at least a portion of your retirement contributions to an IRA or workplace retirement plan. The credit, which won’t change next year, is worth up to $1,000 for single filers; and up to $2,000 for married couples filing jointly.
To qualify in 2026, your income may not exceed $40,250 if you’re a single filer or married filing separately, which is up $750 from this year’s income limit. If you file as head of household, your income may not be more than $60,375, up $1,125 compared to this year. And it may not top $80,500 if you’re married filing jointly, up $1,500.
If you’re employed by a small business offering a SIMPLE IRA at work and put retirement savings into a SIMPLE account, you may save up to $17,000 next year, up from $16,500 today; although for some types of SIMPLE accounts the contribution limit rises to $18,100, up from $17,600.
And the catch-up contribution limit will be increased to $4,000 from $3,500 currently. Savers who are between the ages of 60 and 63 may contribute an additional $5,250, which is the same as this year.
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