IRS Increases 401(k) and IRA Contribution Limits for 2026: Find Out How Much
The IRS has announced significant increases in retirement plan contribution limits for 2026. These adjustments offer Americans the opportunity to save more in their 401(k) and individual retirement accounts (IRAs), promoting greater financial security in retirement.
New Contribution Limits for 2026
As of Thursday, the IRS has set the following contribution limits for 401(k), 403(b), and 457 plans:
- Maximum Contribution: $24,500, an increase from $23,500 in 2025.
- Catch-Up Contribution for Workers Aged 50 and Older: $8,000, up from $7,500 in the current year.
For traditional and Roth IRAs, the contribution limit will rise as follows:
- Annual IRA Contribution Limit: $7,500, increased from $7,000.
- IRA Catch-Up Contribution for Individuals Aged 50 and Older: $1,100 adjustment, up from $1,000.
Challenges Despite Increasing Limits
Despite these annual increases, many Americans remain financially unprepared for retirement. Recent research from Vanguard indicates that only 40% of individuals feel they are on track to sustain their current lifestyle after they stop working. Furthermore, a report from Goldman Sachs revealed that 42% of working Americans, spanning from Gen Z to Gen X, report having no disposable income after covering essential living expenses.
These findings highlight the financial strain faced by many households, making it challenging for workers to fully capitalize on tax-advantaged retirement plans. In fact, Vanguard’s data showed that only 14% of Americans were able to contribute the maximum amount to their 401(k)s in 2024, primarily among older adults and higher earners.
As the IRS adjusts these contribution limits, the importance of saving for retirement cannot be overstated. Individuals are encouraged to evaluate their financial strategies and explore options for maximizing contributions to prepare for a secure future.
