ARTICLE | November 20, 2025
Summary: The IRS has raised retirement plan contribution limits for 2026, including 401(k)s, IRAs, Roth IRAs, SIMPLE IRAs, and the Saver’s Credit. Notable increases include higher catch-up contributions and expanded income thresholds. SECURE Act 2.0 introduces new Roth requirements for high earners. Taxpayers should review these updates to maximize savings opportunities, eligibility, and phase-out rules.
The Internal Revenue Service (IRS) has announced the updated retirement plan contribution limits for 2026, featuring cost-of-living adjustments and providing enhanced opportunities for tax-advantaged savings. With these changes impacting a broad spectrum of plans, including 401(k)s, IRAs, and other qualified retirement accounts, individuals must plan effectively by staying informed and revisiting their financial strategies to maximize their retirement contributions.
Contribution Limits for 2026
For the 2026 tax year, the annual contribution limits for 401(k), 403(b), 457, and Thrift Savings Plans have increased from $23,500 to $24,500 compared to 2025. The standard catch-up contribution limit also increased from $7,500 to $8,000. Taxpayers between the ages of 60-63 can benefit from an even greater boost and are allowed to contribute the enhanced catch-up of $11,250.
It’s important to note that starting in 2026, the SECURE Act 2.0 introduces a new requirement for high earners, defined as plan participants who received more than $150,000 in FICA Wages, Box 3 Form W-2 for 2025. These individuals must make their 401(k) catch-up contributions on a Roth Basis beginning in 2026, as clarified in a recent IRS guidance.
This change will also affect plan administrators who may need to either amend their plan to allow Roth contributions or remove catch-up contributions entirely. Plan administrators will need to contact their payroll provider soon to confirm they can:
- Identify employees meeting the income threshold.
- Process Roth catch-up contributions, including “deemed Roth catch-up” if their plan allows Roth contributions.
- Block catch-up contributions if the plan does not allow Roth contributions.
- Reminder: Deemed Roth catch-up means the plan automatically treats catch-up contributions as Roth for the affected participants — no extra paperwork from the participant is needed. This simplifies administration and helps to maintain compliance, but payroll providers must support this.
If errors are made, there are a few options for correction. However, the IRS requires that each plan has a written correction procedure in place. If you don’t have one, the only fix is to refund the mistaken contribution, which is not ideal.
In addition, IRA plans have also seen increased limits for both annual contributions and catch-up limit amounts. The annual IRA contribution limit is now $7,500, up from $7,000, and the catch-up contribution limit for individuals aged 50 and older increased from $1,000 to $1,100.
Wage Limits for Traditional IRA Plans
Taxpayers who are covered by a workplace retirement plan may also contribute to a traditional IRA, if their modified adjusted gross income (MAGI) doesn’t exceed certain thresholds determined by their tax filing status. For IRA contribution deduction purposes, MAGI is calculated by starting with your adjusted gross income (AGI) from IRS Form 1040 and then adding back certain items. These may include deductions for IRA, the student loan interest, the foreign earned income exclusion and the housing exclusion or deduction, interest from Series EE and I U.S. savings bonds used for higher education that was excluded from income and excluded employer-provided adoption assistance.
Income Phase-Out Ranges for Traditional IRA Deductions
| Single taxpayers covered by a workplace retirement plan | Married couples filing jointly (contributor covered by a workplace plan) | Married IRA contributor NOT covered by a workplace plan, but spouse is | Married individuals filing separately (covered by a workplace plan) |
|---|---|---|---|
| The phase-out range is increased to between $81,000 and $91,000 of MAGI, up from between $79,000 and $89,000. | The phase-out range is increased to between $129,000 and $149,000, up from between $126,000 and $146,000. | The phase-out range is increased to between $242,000 and $252,000, up from between $236,000 and $246,000. | The phase-out range is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000. |
Wage Limits for Roth IRA’s, the Saver’s Credit and SIMPLE retirement accounts
New Phase-Out Ranges for Roth IRA’s
For the 2026 tax year, the income phase-out range for taxpayers making contributions to a Roth IRA has increased:
| Taxpayers filing as a single or head of household | Married couples filing jointly | Married couples filing separately |
|---|---|---|
| The phase-out range is increased to between $153,000 and $168,000 of their MAGI, up from the 2025 range of $150,000 and $165,000. | The phase-out range is increased to between $242,000 and $252,000, up from between $236,000 and $246,000. | The phase out remains between $0 and $10,000. |
Increased Saver’s Credit Thresholds
The Saver’s Credit, also known as the Retirement Savings Contributions Credit, for low- and moderate-income workers has higher income limits for 2026:
| Taxpayers filing as a single or head of household | Married couples filing jointly | Married couples filing separately |
|---|---|---|
| Increased to $60,375, up from $59,250. | Increased to $80,500, up from $79,000. | Increased to $40,250, up from $39,500. |
SIMPLE IRA Contribution and Catch-Up Adjustments
Annual contribution limits for SIMPLE retirement accounts will rise in 2026. Individuals can now contribute up to $17,000, an increase from $16,500. Pursuant to a change made from SECURE 2.0, certain eligible SIMPLE retirement accounts allow for a higher contribution limit, which has increased to $18,100, up from $17,600.
Employees aged 50 and older participating in most SIMPLE plans can now make catch-up contributions up to $4,000, an increase from $3,500 in 2025. Due to a change made in SECURE 2.0, for those in certain applicable SIMPLE plans, the catch-up limit remains at $3,850. Additionally, a higher catch-up contribution limit for employees aged 60-63 who participate in SIMPLE plans remains unchanged at $5,250 for 2026.
Click the following link for the full list of IRS Cost of Living Adjustments.
Final Thoughts: Making the Most of Your Retirement Plan
The 2026 retirement plan updates bring significant opportunities for taxpayers. With substantial increases to contribution and catch-up limits across various plans, such as 401(k)s, IRAs, Roth IRAs, Simple IRAs, and the Saver’s Credit, taxpayers have more ways to boost their retirement savings than ever before. These enhancements, driven by IRS cost-of-living adjustments and the SECURE Act 2.0 provisions, affect both the maximum amounts individuals can contribute and the income thresholds for eligibility and phase-outs.
Please connect with your advisor if you have any questions about this article.
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This article was written by Aprio and originally appeared on 2025-11-20. Reprinted with permission from Aprio LLP.
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