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The IRS has introduced new 401(ok) contribution limits for 2026.
In its launch Thursday, the company elevated the worker deferral restrict to $24,500 subsequent 12 months, up from $23,500 in 2025. The change applies to 401(ok)s, 403(b)s and most 457 plans, together with the federal Thrift Financial savings Plan.
The IRS additionally unveiled 2026 catch-up contribution limits for savers age 50 and older, new particular person retirement account financial savings limits and better earnings thresholds for Roth IRA contributions.
Beginning in 2026, the 401(ok) catch-up contribution restrict will rise to $8,000 for savers 50 and older, from $7,500 in 2025. However buyers aged 60 to 63 can as an alternative save an additional $11,250, primarily based on modifications enacted through Safe 2.0. That determine is unchanged from 2025.
Each quantities are along with the $24,500 deferral restrict for 2026.
In 2024, solely 14% of contributors maxed out their 401(ok)s, based on Vanguard’s 2025 How America Saves report, which was primarily based on greater than 1,400 certified plans and almost 5 million contributors. The typical mixed financial savings fee, together with employer deposits, was an estimated 12%, based on the identical report.
A separate report discovered the common 401(ok) financial savings fee, together with worker and employer contributions, was a mixed 14.2% in the course of the second quarter of 2025, based on a Constancy Investments evaluation of greater than 25,000 company plans and 24.6 million contributors.
The IRS announcement comes hours after President Donald Trump signed into legislation a funding invoice to finish the longest federal authorities shutdown in U.S. historical past. It additionally comes roughly a month after the company launched dozens of inflation changes for 2026, together with federal earnings tax brackets, greater capital good points brackets and provisions impacting households, amongst others.
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