The Internal Revenue Service (IRS) has released Notice 2025-67, containing cost-of-living adjustments for 2026 that affect the amounts employees can contribute to 401(k) plans, individual retirement accounts (IRAs), and other qualified retirement plans.
2026 Increases
The employee contribution limit for 401(k) plans in 2026 has increased to $24,500, up from $23,500 for 2025.
Other key limitations include the following:
- IRA contribution limit is increased to $7,500, up from $7,000.
- The IRA catch‑up contribution limit for individuals aged 50 and over was amended under SECURE 2.0 to include an annual cost‑of‑living adjustment is increased to $1,100, up from $1,000 for 2025.
- The employee contribution limit for SIMPLE IRAs and SIMPLE 401(k) plans increases to $17,000, up from $16,500.
- The threshold used to define a “highly compensated employee” remains the same at $160,000, and the “key employee” threshold rises to $235,000 (up from $230,000).
- The contribution limit for defined contribution plans (such as 401(k), profit-sharing, and money purchase plans) increases to $72,000, up from $70,000.
- The annual compensation limit applicable to many retirement plans increases to $360,000, up from $350,000.
- The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal Thrift Savings Plan increases to $8,000.
- This means participants age 50 and older can contribute up to $32,000 in 2026.
- The special catch-up contribution for participants aged 60 through 63, introduced under SECURE 2.0, is $11,250 for 2026, allowing those participants to contribute up to $35,750.
- The defined benefit plan annual benefit limit increases to $290,000, up from $280,000.
Updated Income Ranges
The income ranges for determining eligibility to make deductible contributions to traditional IRAs, contribute to Roth IRAs, and claim the Saver’s Credit (Retirement Savings Contributions Credit) also increase for 2026.
More Information
For more details on the 2026 cost-of-living adjustments, visit the IRS news release.
For further information or help with retirement plan design and administration, contact RMC Group at 239-298-8210 or rmc@rmcgp.com.