IRS Reveals Higher Retirement Plan Limits for 2026

The IRS recently announced changes to retirement plan numbers for next year, putting your year-end prep in high gear.

The 401(k) plan salary deferral limit will bump up to $24,500 (currently $23,500).

How about the salary deferral limit for 403(b) plans and most 457 retirement plans? They’ll also see that increase to $24,500.

Meanwhile, employees age 50 or older can opt to make 401(k), 403(b) and 457 retirement plan catch-up contributions of up to $8,000 – the max is $7,500 in the current year.

Due to changes brought about by the SECURE 2.0 Act, the catch-up contribution limit is considerably higher than $8,000 for some employees. In fact, individuals who will reach age 60, 61, 62 or 63 next year will be able to contribute $11,250 – that’s not changing from 2025.

The Secure 2.0 Act also said that once employees’ wages hit a certain amount, catch-up contributions to their employer-sponsored retirement plans would need to be made to Roth accounts. That threshold will jump from $145,000 to $150,000. For 2026, employers would look back to employees’ wages in 2025.

IRS announced additional cost-of-living adjustments for 2026, including changes applicable to defined contribution (DC) and defined benefit (DB) plans.

• The limit on additions to DC plans will be $72,000 (up from $70,000).
• Meanwhile, the maximum benefit for DB plans will increase to $290,000 (currently $280,000).

Other Retirement Plan Numbers You Need

IRS included more updates in Notice 2025-67. Here are the details:

Pension-linked emergency savings accounts (PLESA) can be included in certain types of defined contribution plans, as allowed by the Secure 2.0 Act. The maximum amount an employee can contribute to this emergency savings fund for 2026 will be $2,600. Currently, it’s set at $2,500.

Employers that offer SIMPLE retirement accounts should note that elective deferrals will max out once they hit $17,000 (bumping up from this year’s $16,500).

The limit on catch-up contributions to SIMPLE plans for individuals age 50 or over will be $4,000, moving up from $3,500. The Secure 2.0 Act provides for higher limits for individuals who will reach the age of 60, 61, 62 or 63 – that amount in 2026 will remain $5,250. For certain applicable plans, the limit will also hold steady at $3,850.

The IRS announced a slight increase in the amount that employees can contribute to an individual retirement account – it’ll be $7,500, up from $7,000 in 2025. That goes up by $1,100 (currently, $1,000) for employees who have reached age 50.

As for simplified employee pensions, the compensation threshold is moving from $750 to $800 in 2026.

Also, the annual compensation limit under Sec. 401(a)(17), among other sections, has been set at $360,000. That’s climbing up from $350,000.

The limit is higher for eligible participants in certain governmental plans. These are retirement plans that under the plan as in effect on July 1, 1993, allowed cost-of-living adjustments to the compensation limitation under the plan to be taken into account. The numbers have increased from $520,000 to $535,000.

Other Adjustments

Also, make sure you catch these changes found in the IRS notice, which you’ll need for some of your nondiscrimination tests:

• The limit for a “key employee” in a top-heavy retirement plan under IRC Sec. 416(i)(1)(A)(i) will increase to $235,000 (from $230,000).
• The limit for a “highly compensated employee” under IRC Sec. 414(q)(1)(B) will remain unchanged at $160,000.

In addition, depending on the fringe benefit valuation method you use, you may need to add these amounts to your systems for 2026:

• The compensation amount for a “control employee” for fringe benefit valuation under Income Tax Regulations Sec. 1.61-21(f)(5)(i) will rise to $145,000 (it’s currently $140,000).
• The compensation amount under Sec. 1.61-21(f)(5)(iii) will jump up to $290,000 (this year, it’s set at $285,000).