Retirement Savings: New Plans Possible Under Existing Law

February 25, 2026 Priya Shah – Business Editor Business

The Internal Revenue Service announced increased contribution limits for a variety of retirement plans for 2026, potentially allowing millions of Americans to bolster their savings. The annual 401(k) contribution limit will rise to $24,500, a $1,000 increase from the $23,500 limit in 2025, according to guidance released in Notice 2025-67.

The changes extend to other retirement vehicles as well. The limit for contributions to an Individual Retirement Account (IRA) will increase to $7,500, up from $7,000 in 2025. Individuals aged 50 and over will also see an increase in their catch-up contribution limits. The IRA catch-up contribution limit will rise to $1,100, while the catch-up limit for those participating in 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan will increase to $8,000.

For those aged 50 and older participating in those plans, the maximum total contribution—regular contribution plus catch-up—will reach $32,500 in 2026. A separate, higher catch-up contribution limit of $11,250 remains in place for those aged 60, 61, 62, and 63.

However, a provision within the SECURE 2.0 Act of 2022 introduces a new requirement for higher earners utilizing catch-up contributions. Beginning in 2026, employees with Social Security wages exceeding $150,000 will be required to create any catch-up contributions on a Roth (after-tax) basis, rather than pre-tax. This change, initially delayed to allow employers time to adjust their systems, could impact the attractiveness of catch-up contributions for some high-income earners.

The IRS also noted that income ranges for determining eligibility to make deductible contributions to traditional IRAs, contribute to Roth IRAs, and claim the Saver’s Credit have also been adjusted for 2026. Specific details regarding these income thresholds were not immediately available but are detailed in Notice 2025-67.

Financial planning firms are advising clients to review their retirement savings strategies in light of these changes. Mercer Advisors noted the increases are “modest but meaningful” for many savers, while Fidelity highlighted the opportunity to maximize savings with the higher limits. The implementation of the Roth catch-up requirement for higher earners remains a key development to watch, particularly for employers who do not currently offer Roth contribution options.