2026 Retirement Contribution Limits: 401(k) and IRA

Written by Samuel, Certified Public Accountant

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Every fall, the IRS adjusts retirement account contribution limits for inflation, and the 2026 numbers are up meaningfully from 2025. Contributing more to a 401(k) or traditional IRA does not just build retirement savings. For most filers it directly reduces taxable income for the year, which makes these limits worth knowing exactly, not approximately.

401(k), 403(b), and Most 457 Plans

• Employee contribution limit: $24,500 for 2026, up from $23,500 in 2025.
• Catch-up (age 50+): an additional amount on top of the base limit.
• Enhanced catch-up (ages 60 to 63): under SECURE 2.0, eligible savers in this age band can contribute an extra $11,250 for 2026, 50% more than the standard catch-up amount.

Traditional and Roth IRAs

• Contribution limit: $7,500 for 2026, up from $7,000 in 2025.
• Catch-up (age 50+): an additional $1,100, bringing the total to $8,600.

Whether a traditional IRA contribution is deductible depends on your income and whether you or your spouse are covered by a workplace plan. High earners with workplace coverage may be phased out of the deduction even though they can still contribute.

SEP-IRA and SIMPLE Plans (Self-Employed and Small Business)

• SEP-IRA: up to $72,000 for 2026, or 25% of compensation, whichever is less.
• SIMPLE IRA: $17,000 for 2026, up from $16,500 in 2025.

These are the accounts most relevant if you are self-employed and do not have access to a traditional employer 401(k). A SEP-IRA in particular allows much larger contributions than a personal IRA.

Why This Matters for Your Tax Bill

Traditional (non-Roth) contributions to these accounts reduce your taxable income dollar-for-dollar in the year you contribute, up to the limit. Maxing out a 401(k) at $24,500 instead of contributing nothing can shift you into a meaningfully lower marginal bracket depending on your income. This is one of the few tax moves that is both fully legal and entirely within your control up until the contribution deadline.

Source: IRS, 2026 401(k) and IRA limit announcement.

Bottom Line

The 2026 limits give you more room than 2025 across every major account type. If you are not already contributing up to your limit, this is one of the most direct, lowest-risk ways to lower this year’s tax bill while building retirement savings at the same time.