2026 Retirement Plan Contribution Limits: Expanded Opportunities for Savers

Big news for retirement savers: contribution limits are on the rise in 2026. Thanks to inflation adjustments and updates under the SECURE 2.0 Act, you can now contribute more to your 401(k), IRA, and other retirement accounts. From boosted catch-up contributions to higher income thresholds, the new limits provide greater flexibility for building long-term financial security. Whether you’re a high-income professional looking to maximize tax-deferred growth or someone just beginning to build a retirement nest egg, these changes offer more incentive to save than ever.

Higher 401(k), 403(b), and 457 Contribution Limits Offer More Flexibility

The most prominent update is the increase in the employee contribution limit for 401(k), 403(b), and governmental 457 plans, which rises to $24,500—up from $23,500 in 2025. For individuals aged 50 and older, the catch-up contribution limit has also grown, now allowing an additional $8,000 to be contributed annually. This brings the total potential contribution for older participants to $32,500. 

A special provision under SECURE 2.0 continues to allow individuals aged 60 through 63 to contribute even more—up to $11,250 in catch-up contributions, providing a powerful tool for those in the final years before retirement. As with other SECURE 2.0 enhancements, the availability of the higher age-60-to-63 catch-up amounts depends on individual plan implementation, so not all employers may offer these amounts immediately.

Enhanced Catch-Up Contributions: A Boost for Those 50 and Over

Catch-up contributions have long served as a valuable planning tool for individuals aged 50 and older who may be accelerating their savings later in their careers. In 2026, the standard catch-up limit for workplace plans increases to $8,000, while the enhanced catch-up for those aged 60 to 63 remains at $11,250. 

However, SECURE 2.0 introduces a new requirement for certain high-income earners: individuals with more than $150,000 in prior-year wages must make their catch-up contributions on a Roth basis. This means those contributions are made with after-tax dollars, but qualified withdrawals in retirement will be tax-free. Importantly, the employer-sponsored plan must offer a Roth contribution option in order for these individuals to comply. If the plan does not permit Roth contributions, catch-up contributions may not be allowed until the plan is amended. While this change may reduce immediate tax deductions, it could benefit long-term tax planning, particularly for those expecting to be in a higher tax bracket in retirement. For affected individuals, this provision adds complexity and underscores the importance of reviewing contribution strategies annually.

IRA Contribution Limits Increase, Along with Inflation-Indexed Catch-Up

Individual Retirement Accounts (IRAs) have also seen an increase. The standard contribution limit for both traditional and Roth IRAs is now $7,500, and for those aged 50 and older, the catch-up contribution—now indexed to inflation—has risen to $1,100. This brings the total allowable contribution for older individuals to $8,600. These accounts remain essential for those seeking to diversify their retirement savings beyond employer-sponsored plans, and the expanded limits make them even more valuable in long-term planning.

New SIMPLE IRA Limits for Small Business Owners and the Self-Employed

For small business owners and self-employed professionals, SIMPLE retirement accounts continue to be a flexible and tax-efficient savings vehicle. In 2026, the base contribution limit for SIMPLE IRAs increases to $17,000, while the catch-up contribution for those aged 50 and older rises to $4,000. Certain applicable SIMPLE plans, as defined under SECURE 2.0, allow for even higher contributions—up to $18,100 in base contributions and $5,250 in catch-up contributions for individuals aged 60 through 63. As with workplace plans, these enhanced SIMPLE limits may require plan amendments or employer adoption before employees can take full advantage of them.

Updated Income Thresholds for IRA and Roth IRA Eligibility

Beyond contribution limits, the IRS has also adjusted the income thresholds that determine who can take full advantage of tax-deductible IRA contributions and Roth IRA eligibility. These thresholds—known as income phase-out ranges—are designed to gradually reduce or eliminate the ability to contribute to certain accounts as income rises.

For traditional IRAs, the deductibility of contributions depends on your income and whether you or your spouse is covered by a retirement plan at work. In 2026, a single filer earning less than $81,000 can deduct the full amount of their IRA contribution from taxable income. Between $81,000 and $91,000, the deduction is gradually reduced, and above $91,000, it’s eliminated entirely. For married couples filing jointly, the full deduction is available if income is below $129,000, phases out between $129,000 and $149,000, and is eliminated above that. If only one spouse is covered by a workplace plan, the phase-out range is even higher—between $242,000 and $252,000. If neither spouse is covered by a workplace plan, the deduction is available regardless of income.

Understanding Roth IRA Phase-Out Ranges and Backdoor Strategies

Roth IRAs, while not tax-deductible, offer tax-free growth and withdrawals in retirement. However, eligibility to contribute directly to a Roth IRA is also income dependent. In 2026, single filers earning less than $153,000 can contribute the full amount. Between $153,000 and $168,000, the contribution limit is reduced, and above $168,000, direct contributions are not allowed. For married couples filing jointly, the phase-out range is $242,000 to $252,000. Those above the limit may still be able to contribute through a strategy known as a backdoor Roth IRA, which involves making a non-deductible contribution to a traditional IRA and converting it to a Roth.

Saver’s Credit Expansion Encourages More Americans to Save

Another important update involves the Saver’s Credit, a federal tax credit designed to encourage retirement savings among low- and moderate-income workers. Unlike a deduction, which reduces taxable income, a credit directly reduces the amount of tax owed. For example, if you qualify for a $1,000 Saver’s Credit, your tax bill is reduced by $1,000. To claim the credit, eligible individuals must contribute to a retirement account such as a 401(k), IRA, or SIMPLE plan and meet income requirements. In 2026, the credit is available to married couples earning up to $80,500, heads of household up to $60,375, and single filers up to $40,250. These represent the upper ends of the phase-out ranges that determine whether a taxpayer qualifies for the 50%, 20%, or 10% credit rate. The credit is calculated using up to $2,000 of qualifying contributions per person ($4,000 for married couples), meaning the maximum credit is $1,000 per person or $2,000 per couple, not $2,000 per person. For many workers, this credit not only lowers taxes but also provides a strong incentive to begin or continue saving for retirement.

Planning Ahead: What These Changes Mean for Your Retirement Strategy

Taken together, the 2026 contribution limit increases and expanded eligibility thresholds represent a significant opportunity for savers at every stage of life. Whether you're just starting out, in your peak earning years, or approaching retirement, these changes provide more flexibility to tailor your strategy, reduce taxes, and build long-term financial resilience.

At Emerald Asset Management, we help individuals and families make confident, informed decisions about their retirement savings. Our team of professionals is available to answer questions about the new contribution limits and help you develop a customized financial plan that aligns with your goals. Whether you're maximizing employer-sponsored contributions, evaluating Roth strategies, or integrating alternative investments into your retirement portfolio, we’re here to help you stay on track for retirement.

Emerald Asset Management is an independent, boutique Registered Investment Advisory firm based in Rocky Mount, NC, serving successful executives, business owners, and high-net-worth individuals across Raleigh, Durham, and Chapel Hill. As a fiduciary-led firm with over 30 years of experience, Emerald provides research-driven investment management and strategic financial planning. The firm specializes in individually managed stock and bond portfolios, alternative investments, and risk management strategies. With a disciplined approach and a commitment to clarity, Emerald helps clients navigate complex financial decisions with confidence. They can be reached at (252) 443-7616 or on the web at www.emeraldam.com. 

This material has been edited with the assistance of artificial intelligence tools. The information presented is based on sources believed to be reliable and accurate at the time of publication. This material is for educational purposes only and does not necessarily reflect the views of the author, presenter, or affiliated organizations. It should not be construed as investment, tax, legal, or other professional advice. Always consult a qualified professional regarding you

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