IRS Raises Retirement Contribution Limits for 2026

Washington, D.C. — The Internal Revenue Service (IRS) has announced changes to contribution limits for retirement accounts for the year 2026. The agency revealed on Thursday that the employee deferral limit for 401(k), 403(b), and most 457 plans will increase to $24,500, up from $23,500 in 2025.

Additionally, the agency has adjusted the catch-up contribution limit for those aged 50 and older. Starting in 2026, the limit will rise to $8,000, compared to $7,500 in 2025. For savers aged 60 to 63, the catch-up contribution remains unchanged at $11,250, allowing these investors to potentially save up to $34,750 in total.

The IRS also announced that the individual retirement account (IRA) contribution limit will increase to $7,500 in 2026, up from $7,000 in 2025. For those age 50 and older, the catch-up contribution for IRAs will jump to $1,100 from $1,000 in the previous year. These contributions apply to both traditional and Roth IRAs.

According to Vanguard‘s 2025 How America Saves report, only 14% of retirement plan participants are making catch-up contributions. The average savings rate across various plans, including employer contributions, was reported to be around 12%.

The IRS announcement regarding increased limits follows shortly after President Donald Trump signed a funding bill aimed at ending the longest federal government shutdown in U.S. history. This update also comes a month after the agency released several inflation adjustments for 2026.