As we head into 2026, the rules around retirement saving have shifted and that means more opportunity for you to turbocharge your retirement plan. The Internal Revenue Service (IRS) recently released its updated contribution limits and “catch-up” rules for 401(k), 403(b), and related retirement plans.
Here’s what’s new and what savvy savers should do now.
2026 Contribution Limits: What’s Changed
- For 2026, the standard employee deferral limit for 401(k), 403(b), most 457 plans, and the federal Thrift Savings Plan rises to $24,500 (up from $23,500 in 2025).
- If you’re age 50 or older, you can now make an additional $8,000 in catch-up contributions: up from $7,500 in 2025.
- For those aged 60–63, the “super catch-up” contribution remains $11,250.
- Putting that together: if you are 50+ (but under 60) you could contribute up to $32,500 in 2026; if you are 60–63 and your plan allows, your total could be as high as $35,750.
In short, the bedrock contribution cap is going up, and older savers get even more room to add to their nest egg.
What About Catch-Up Contributions & New Rules for 2026
Beyond the higher limits, there’s another important shift for many savers:
- Under the SECURE 2.0 Act of 2022, beginning in 2026, catch-up contributions from employees whose prior-year wages exceed $150,000 (2025 FICA wages) must be made as Roth (after-tax) contribution, meaning no immediate tax deduction, but potential tax-free growth and withdrawals later.
- Your plan sponsor (employer) must support Roth 401(k) in order for catch-up contributions to continue under this rule. If your employer’s plan doesn’t offer Roth 401(k), it may limit options for high-earning, catch-up-eligible participants.
This shift makes it especially important to check with your employer (or plan administrator) to verify whether your plan will support Roth catch-up contributions for 2026 and whether you need to take action to maximize your retirement savings strategy.
Why This Matters — And Why Planning Ahead Is Smart
- More room to save: The higher limits, especially the larger catch-up amounts, means those planning for retirement (or trying to catch up) have a valuable opportunity to increase savings without changing jobs or income.
- Tax strategy matters: For high earners, switching catch-up contributions to Roth means rethinking whether you want the short-term tax break (traditional) or long-term tax-free potential (Roth).
- Proactive moves payoff: Waiting until the end of the year may result in missed opportunities. Starting now you can adjust payroll elections, ensure Roth options are available, and “set it and forget it” with automated contributions.
- Comprehensive planning: Retirement savings don’t exist in a vacuum: contributions, tax strategy, employer match potential, and broader financial goals (like retirement age, cash flow, tax planning, and estate planning) all work together.
What You Should Do: A Pre-2026 Checklist
- Review your current 401(k) elections: see how much you’re saving now, and whether you could increase your deferral for 2026.
- If you’re 50 or older, plan catch-up contributions: decide whether you’ll take advantage of the new $8,000 limit (or $11,250 if 60–63).
- Check with HR or plan administrator: confirm whether your employer’s plan will support Roth catch-up contributions (if your income qualifies).
- Update payroll or contribution elections early: don’t wait until December. Spreading contributions across the year can make the increase manageable and reduce “timing risk.”
- Consider holistic retirement planning: integrate contributions with long-term goals, tax strategy, and expected retirement timeline.
Final Thoughts
2026 brings a meaningful boost to retirement-saving potential. With higher contribution limits and more generous catch-up allowances, long with new Roth rules for higher earners, there’s real opportunity for many to make significant strides toward their retirement goals.
If you haven’t yet reviewed your retirement strategy for the coming year, now is the time. Planning ahead can help you maximize benefits, avoid surprises, and set yourself up for long-term financial confidence.
As always, if you’d like help evaluating how these changes apply to your personal financial situation, or guidance tailoring your retirement plan, our team is here to help. Schedule a consult now!
