On November 5, 2025, the Treasury Department and IRS announced penalty relief from One, Big,
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On November 13, 2025, the Internal Revenue Service announced their annual cost-of-living adjustments for retirement plan contribution limits for tax year 2026. These adjustments bring meaningful increases across multiple retirement accounts, giving clients additional opportunities to save for retirement.
Contribution Limit Increases to 401(k) and IRAs
The most significant change for 2026 is the 401(k) contribution limit increase to $24,500, up $1,000 from 2025’s limit of $23,500. This increase applies broadly to 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan.
IRA savers will also benefit from increased limits in 2026. The standard IRA contribution limit rises to $7,500 from $7,000—a $500 increase for clients who may not have access to employer-sponsored plans or who are looking to diversify their retirement savings strategy. For individuals aged 50 and over, the IRA catch-up contribution limit increases to $1,100, up from $1,000. This catch-up limit now includes annual cost-of-living adjustments thanks to amendments made under the SECURE 2.0 Act of 2022, ensuring these limits keep pace with inflation going forward.
Catch-Up Provisions
For 2026, employees aged 50 and over participating in 401(k), 403(b), governmental 457 plans, and the Thrift Savings Plan can contribute an additional $8,000 in catch-up contributions, up from $7,500 in 2025. Combined with the standard $24,500 limit, participants aged 50 and older can contribute up to $32,500 annually starting in 2026.
SECURE 2.0’s Section 109 created higher catch-up limits for participants aged 60 through 63. Rather than the standard $8,000 catch-up amount, this age group can contribute up to $11,250 in catch-up contributions—a difference of $3,250 that allows for accelerated retirement savings during these peak earning years.
SIMPLE retirement accounts follow a similar pattern. The general contribution limit increases to $17,000 from $16,500, while certain applicable SIMPLE retirement accounts accept higher contributions of $18,100, up from $17,600. For catch-up contributions, participants aged 50 and over can add $4,000 to their SIMPLE plans, up from $3,500. The special age 60-63 provision applies here as well, with these participants eligible to contribute up to $5,250 in catch-up amounts.
Income Phase-Out Ranges
Likewise, the IRS adjusted income phase-out ranges that determine eligibility for traditional IRA deductions and Roth IRA contributions. These changes expand access for higher-income earners while maintaining the progressive structure of retirement savings incentives.
Traditional IRA Deduction Phase-Outs (for those covered by workplace plans):
- Single taxpayers: $81,000 to $91,000 (up from $79,000 to $89,000)
- Married filing jointly (contributing spouse covered): $129,000 to $149,000 (up from $126,000 to $146,000)
- Married filing jointly (contributing spouse not covered, but spouse is): $242,000 to $252,000 (up from $236,000 to $246,000)
Roth IRA Contribution Phase-Outs:
- Singles and heads of household: $153,000 to $168,000 (up from $150,000 to $165,000)
- Married filing jointly: $242,000 to $252,000 (up from $236,000 to $246,000)
Planning Considerations
With the new increases to contribution limits for 2026, clients will be able to take advantage of additional retirement savings opportunities, particularly clients aged 60 through 63 who can take advantage of the enhanced catch-up contribution limit of $11,250 for 401(k) and similar plans. The adjusted income phase-out ranges may affect a client’s eligibility for IRA deductions and Roth IRA contributions, making it important to review how these changes impact individual clients.
For more information on the IRS increasing retirement plan contributions for the 2026 tax year, please see the following from the IRS:
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