What's Happening?
The Internal Revenue Service (IRS) has announced new retirement savings limits for 2026, allowing individuals to contribute more to their tax-advantaged accounts. The maximum contribution for 401(k) plans
will rise to $24,500, up from $23,500 in 2025. Similar increases apply to 403(b) accounts, most 457 plans, and the federal Thrift Savings Plan. Additionally, catch-up contributions for those aged 50 and over will increase to $8,000, while the enhanced catch-up provision for individuals aged 60 to 63 remains at $11,250. The IRS is also raising income thresholds for Roth IRA eligibility and increasing limits for the Saver’s Credit.
Why It's Important?
These changes provide an opportunity for workers to enhance their retirement savings, especially as retirement becomes longer and more expensive. The increased limits allow individuals to save more each year, potentially improving their financial security in retirement. Higher income thresholds for Roth IRA contributions may prompt higher earners to reassess their savings strategies. Financial experts suggest that these adjustments could help individuals better prepare for their long-term financial goals.
What's Next?
The full list of changes for 2026 is available on the IRS website, and individuals are encouraged to review these updates to maximize their retirement savings. Financial advisors may play a crucial role in helping individuals navigate these changes and optimize their savings strategies.
