As you look toward your 2026 financial goals, one of the most powerful tools at your disposal is the recent update from the IRS regarding retirement contribution limits. With inflation-adjusted increases across the board, the new year brings more "room in the bucket" to grow your tax-advantaged savings.
Individual Retirement Accounts (IRAs)
Traditional IRA contribution limits are up $500 in 2026 to $7,500. Catch-up contributions for those over age 50 are up $100 to $1,100, bringing the total limit to $8,600.
Remember, once you reach age 73, you must begin taking required minimum distributions from a Traditional IRA in most circumstances. Withdrawals are taxed as ordinary income and, if taken before age 59½, may be subject to a 10 percent federal income tax penalty.
Roth IRAs
The income phase-out range for Roth IRA contributions increases to $153,000-$168,000 for single filers and heads of household, a $3,000 increase. For married couples filing jointly, the phase-out will be $242,000-$252,000, a $6,000 increase. Married individuals filing separately see their phase-out range remain at $0-10,000.
To qualify for the tax-free and penalty-free withdrawal of earnings, Roth 401(k) distributions must meet a five-year holding requirement and occur after age 59½. Tax-free and penalty-free withdrawals can also be taken under certain other circumstances, such as the owner's death.
Workplace Retirement Accounts
Those with 401(k), 403(b), 457 plans, and similar accounts will see a $1,000 increase for 2026, the limit rising to $24,500. Those aged 50 and older will continue to have the ability to contribute an extra $8,000, bringing their total limit to $32,500. Those aged 60, 61, 62, and 63 may enjoy a higher catch-up contribution of $11,250, raising their total contribution limit to $35,750.
Once you reach age 73 you must begin taking required minimum distributions from your 401(k) or other defined-contribution plans in most circumstances. Withdrawals are taxed as ordinary income and, if taken before age 59½, may be subject to a 10 percent federal income tax penalty.
SIMPLE Accounts
A $500 increase in limits for 2026 gives individuals contributing to this incentive match plan a $17,000 stoplight. Pursuant to the SECURE Act 2.0, certain applicable plans have an increased limit of $18,100.
Much like a traditional IRA, once you reach age 73, you must begin taking required minimum distributions from a SIMPLE account in most circumstances. Withdrawals are taxed as ordinary income and, if taken before age 59½, may be subject to a 10 percent federal income tax penalty.