IRS Announces Higher Retirement Contribution Limits for 2026 170

 in IRS News  tagged IRS Announces Higher Retirement Contribution Limits for 2026 by (updated 29 days ago)

The Internal Revenue Service (IRS) has announced significant increases in retirement savings limits for the 2026 tax year, primarily driven by cost-of-living adjustments. This allows individuals to save more in their workplace retirement plans and Individual Retirement Arrangements (IRAs). The full details are available in Notice 2025-67.

📈 Workplace and IRA Contribution Limits

Contribution limits for popular retirement accounts are increasing for 2026:

  • 401(k), 403(b), 457 Plans, and TSP: The standard employee contribution limit rises by $1,000, from $23,500 to $24,500.

  • Traditional and Roth IRA: The annual contribution limit increases by $500, from $7,000 to $7,500.

  • SIMPLE Retirement Accounts: The standard employee contribution limit increases by $500, from $16,500 to $17,000.

Catch-Up Contributions (Age 50+)

Catch-up contributions, which allow older workers to save extra, are also increasing:

Retirement Plan Age 50+ Catch-Up Limit (2026) Total Potential Contribution (2026) Notes
401(k), 403(b), etc. $8,000 (Up from $7,500) $32,500 ($24,500 + $8,000) Higher limits apply for ages 60-63 ($11,250).
IRA $1,100 (Up from $1,000) $8,600 ($7,500 + $1,100) Annual adjustment was added by the SECURE 2.0 Act.
SIMPLE Plans $4,000 (Up from $3,500) $21,000 ($17,000 + $4,000) Higher limits apply for ages 60-63 ($5,250).

📊 Income Phase-Out Ranges for 2026

The income levels that affect eligibility for deductible Traditional IRA contributions and Roth IRA contributions have also increased, allowing higher earners to qualify for these tax benefits.

Traditional IRA Deduction Phase-Out

If you or your spouse are covered by a workplace retirement plan, your ability to deduct Traditional IRA contributions is subject to the following Modified Adjusted Gross Income (MAGI) phase-out ranges for 2026:

  • Single Taxpayers: $81,000 to $91,000 (Up from $79,000–$89,000).

  • Married Filing Jointly (Contributor Covered): $129,000 to $149,000 (Up from $126,000–$146,000).

  • Married Filing Jointly (Contributor NOT Covered, Spouse IS Covered): $242,000 to $252,000 (Up from $236,000–$246,000).

Note: If neither spouse is covered by a retirement plan at work, the deduction is not subject to these phase-out rules.

Roth IRA Contribution Phase-Out

The ability to contribute to a Roth IRA phases out for the following MAGI ranges in 2026:

  • Singles and Heads of Household: $153,000 to $168,000 (Up from $150,000–$165,000).

  • Married Filing Jointly: $242,000 to $252,000 (Up from $236,000–$246,000).

🏛️ Saver’s Credit Income Limits

The maximum income limits for low- and moderate-income workers to claim the Saver’s Credit (Retirement Savings Contributions Credit) have also risen for 2026:

  • Married Filing Jointly: $80,500 (Up from $79,000).

  • Heads of Household: $60,375 (Up from $59,250).

  • Singles/Married Filing Separately: $40,250 (Up from $39,500).

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