What Do the New 2026 401(k) Contribution Limits Mean for Your Retirement Plan?
Published on by Jessica Doremus in Benefit Plan Audits
- The 401(k) annual contribution limit for 2026 is $24,500, an increase from $23,500 in 2025.
- The total 401(k) contribution limit for participants age 50 and older is $32,500, including an $8,000 catch-up contribution.
- Individuals ages 60 to 63 may contribute up to $11,250 in enhanced catch-up contributions, as provided under the SECURE 2.0 Act.
- The annual IRA contribution limit for 2026 is $7,500, offering an additional retirement savings option.
2026 is here and the IRS hasn’t slowed down. The retirement savings landscape continues to shift, and there are some meaningful updates worth knowing about. For anyone serious about building a secure retirement, now is a great time to revisit the numbers with fresh eyes.
To recap our earlier blog post on this topic, the annual 401(k) contribution limit increased to $23,500 in 2025, up from $23,000 in 2024. Building on that foundation, the limit has been raised again to $24,500 in 2026, giving participants even more room to grow retirement savings on a tax-advantaged basis.
Standard catch-up contributions
The IRS rewards those in the home stretch of their careers with catch-up contributions, and 2026 isn’t any different. Participants aged 50 and older can contribute an additional $8,000 on top of the standard limit, bringing the total potential contribution to $32,500 for the year. That’s up from $7,500 in 2025, a nice bump for anyone looking to accelerate savings in the years leading up to retirement.
Enhanced catch-up contributions for ages 60-63
Thanks to the SECURE 2.0 Act, participants between the ages of 60 and 63 get an even bigger catch-up opportunity, up to $11,250 in additional contributions if the plan allows it. This provision remained consistent from 2025, and it’s one of the most powerful tools available for those wanting to make a strong push toward retirement in these key years.
Compensation and IRA limits
The maximum amount of compensation that can be considered for contribution calculations has increased to $360,000 in 2026, up from $350,000 in 2025. This is an important threshold for business owners and HR professionals to keep in mind when structuring employer contributions.
On the IRA side of things, contribution limits have also ticked upward to $7,500 per year in 2026, or up to 100% of earned income if it falls below that threshold. Those 50 and older can contribute an additional $1,100 as a catch-up, providing yet another avenue to build a more secure retirement.
Employer and plan sponsor considerations
For businesses sponsoring a 401(k) plan, these updates are a great opportunity to revisit plan design, refresh employee communications, and make sure the whole team knows what’s available to them. A well-informed workforce is a more financially secure one, and that’s a win for everybody.
Next steps
Have questions about what these changes mean for a business or retirement strategy? Our team of top employee benefit plan audit pros can help you navigate the latest IRS updates and make informed decisions for the year ahead. Contact us today to schedule a free consultation. As always, we’re here to help.
Additional resources
You may be interested in our employee benefit plan audit video series, available on-demand, or the most recent 401(k) plan management report. We also have an employee benefit plan audit FAQ page, a helpful resource with answers to some of the most frequently asked questions on the topic.
