If you have been maxing out your retirement accounts, 2026 handed you a raise. The IRS lifted the employee contribution limit for 401(k) plans to $24,500 this year, up from $23,500 in 2025, and pushed the IRA limit to $7,500, up from $7,000. The official announcement came last November, and the new numbers apply to every paycheck you defer in 2026.
These annual adjustments matter even if you never get close to the ceiling. They are the government’s yardstick for how much tax-advantaged saving it will allow, and they quietly compound. A worker who adds just the extra $1,000 of 401(k) room each time the limit rises is buying decades of tax-deferred growth on money that would otherwise sit in a taxable account. Here is the full picture for 2026, with the fine print that trips people up.
The 2026 numbers at a glance
The $24,500 employee limit applies to 401(k) plans, 403(b) plans for school and nonprofit workers, most 457 plans for government employees, and the federal Thrift Savings Plan. It counts your own salary deferrals, both pretax and Roth. Employer matching dollars do not count against it; they fall under a separate, much higher overall limit.
For IRAs, the $7,500 cap covers traditional and Roth IRAs combined. You cannot put $7,500 in each. The limit is per person, not per account, so opening a second IRA at a different brokerage buys you no extra room. Full details on every 2026 figure are in IRS Notice 2025-67, the cost-of-living adjustment document the agency publishes each fall.
Catch-up contributions if you are 50 or older
Workers who are 50 or older at any point during 2026 can contribute beyond the standard limits. The 401(k) catch-up amount rose to $8,000 this year, up from $7,500, which means a 50-plus saver can defer up to $32,500 of salary. The IRA catch-up also moved for the first time in years: it is now $1,100, up from the $1,000 figure that had been frozen for more than a decade. That puts the IRA ceiling for older savers at $8,600.
You qualify for the whole year as long as you turn 50 by December 31. There is no need to wait for your birthday; a worker turning 50 in November can use the catch-up room starting in January. The IRS explains the mechanics on its catch-up contributions page.
The bigger catch-up for ages 60 through 63
A newer wrinkle from the SECURE 2.0 law gives workers who turn 60, 61, 62, or 63 during the calendar year an enhanced catch-up in workplace plans. For 2026 that enhanced amount is $11,250 instead of the regular $8,000. A 61-year-old with the cash flow to use it can defer $35,750 in total. The window is narrow by design: once you turn 64, you drop back to the standard catch-up amount.
A new rule for higher earners’ catch-ups
Starting in 2026, there is a string attached to catch-up contributions for people with bigger paychecks. If your Social Security wages from your employer topped $150,000 in the prior year, any catch-up contributions you make to that employer’s plan must go in as Roth, meaning after-tax money. You lose the up-front deduction on those dollars, though the money then grows tax-free. If your plan does not offer a Roth option, affected workers cannot make catch-up contributions at all, which is pushing many employers to add one. If you are near that wage line, it is worth a call to your plan administrator before you set this year’s deferral percentage.
Income limits still apply to IRA tax breaks
The IRA contribution limit is only half the story. Whether you can deduct a traditional IRA contribution depends on your income and whether you or your spouse has a retirement plan at work, and the ability to contribute directly to a Roth IRA phases out above certain income levels. Those phase-out ranges rose with inflation for 2026 and are listed in the same IRS notice linked above. If your income lands you in a phase-out range, you can still contribute to a traditional IRA; you just may not get the deduction, and the contribution should be reported as nondeductible on Form 8606.
How to actually use the extra room
If you contribute by percentage of pay, check whether your current rate will land you at the new limit by December. A saver who set 15 percent of salary years ago may be leaving room unused now that the ceiling moved. Most plan websites show year-to-date deferrals; divide what is left of the limit by your remaining paychecks to find the rate that gets you there.
One caution for those who do max out: if you hit $24,500 in October, your contributions stop, and so might your employer match for the rest of the year unless your plan has a true-up feature that pays the missed match later. Ask your benefits office whether a true-up exists. If it does not, spreading contributions evenly across all pay periods usually captures the full match.
IRA savers have more runway. Contributions for 2026 can be made until the tax filing deadline in April 2027, so a year-end bonus or a spring tax refund can still fund this year’s IRA. The IRS limits page keeps a running history of every year’s figures if you want to see how far these caps have climbed. The pattern is steady: the room grows almost every year, and the savers who adjust their contributions to follow it are the ones who quietly end up ahead.
