Each new year brings an opportunity to reassess how much you’re saving for retirement, and 2026 delivers increases across the board. The IRS announced higher contribution limits for 401(k) and IRAs, as well as several catch-up provisions, giving many savers more room to grow their tax-advantaged savings. SECURE 2.0 Act changes also introduce a rule affecting catch-up contributions for higher-income earners that takes effect this year.
This article covers everything you need to know about the 2026 IRA and 401(k) contribution limits, income thresholds and tax deduction rules.
The table below summarizes the IRS’s core 2026 retirement contribution limits.
The $24,500 employee limit applies to all traditional and Roth workplace plans, not a separate limit per account. The $72,000 combined limit includes employee contributions, employer matching contributions and employer contributions, but not age-based catch-up contributions.
The 401(k) employee contribution limit rises to $24,500 in 2026, up from $23,500 in 2025. This limit also applies to 403(b), governmental 457(b) and Thrift Savings Plans. Plan terms, not just IRS limits, determine which contribution options, catch-ups and employer contributions are available to you.
Traditional 401(k) contributions are made on a pretax basis, reducing your taxable income. Contributions and investment earnings are taxed at the time of withdrawal. For those who want to lower today’s tax bill and expect to be in a lower bracket in retirement, traditional contributions make sense.
Roth 401(k) contributions are made with after-tax dollars, so they do not lower your taxable income. Qualified withdrawals, however, can be tax-free. Unlike Roth IRAs, Roth 401(k)s have no income limits. High earners can contribute regardless of their MAGI.
Traditional and Roth 401(k) contributions share the $24,500 employee limit. For example, you could contribute $14,500 to a traditional and $10,000 to a Roth 401(k), but not $24,500 to each. Choose based on whether a current tax deduction or future tax-free retirement income is more valuable.
See our article “Roth vs Traditional IRA” for a deeper comparison, keeping in mind that IRA and workplace plan rules differ.
For 2026, the combined employee and employer contribution limit is $72,000, including:
Employee pretax and Roth deferrals
Employer matching contributions
Employer nonelective or profit-sharing contributions
After-tax employee contributions, when the plan permits them
For example, if you contribute $24,500 and your employer adds $10,000, the total of $34,500 counts toward the $72,000 limit. This leaves more room for employer or after-tax contributions if allowed.
Business owners and self-employed individuals who use a solo 401(k) can contribute as both employee and employer. Solo 401(k)s follow plan and compensation rules, making them useful for maximizing retirement savings.
Participants aged 50 or older by the end of 2026 may contribute an additional $8,000 above the standard $24,500 limit if your plan allows catch-up contributions, for a total of $32,500. The $8,000 limit is up from $7,500 in 2025.
Under the SECURE 2.0 change, participants aged 60-63 in 2026 qualify for a higher catch-up contribution limit of $11,250. This replaces the standard $8,000 catch-up for eligible participants in this age window, bringing their total potential employee contribution to $35,750. Those who are 64 or older are eligible for the standard $8,000 catch-up limit.
For 2026, those whose 2025 wages from their plan’s sponsoring employer exceeded $150,000 must make catch-up contributions on a Roth basis if the plan allows it. Roth catch-ups are made after tax and do not lower current taxable income.
This threshold is based on the prior year’s wages from the plan sponsor, not the participant’s household or adjusted gross income. Multiple income sources do not exempt someone if the sponsor paid them more than $150,000 in 2025.
Confirm with your employer how the plan will implement the catch-up rule changes, especially if you have changed jobs or have more than one plan.
The combined IRA contribution limit increases to $7,500 for those under age 50 and $8,600 for those 50 or older, including a $1,100 catch-up. This limit applies to all traditional and Roth IRAs owned, not each account separately.
For example, if you are under 50, you can contribute $4,000 to a traditional IRA and $3,500 to a Roth IRA, but you cannot contribute $7,500 to both. You also cannot contribute more than your taxable income for the year.
There is no income limit to make contributions to a traditional IRA. However, income and workplace-plan coverage may affect whether the contribution is fully or partially deductible. Nondeductible contributions must be tracked and reported on Form 8606.
Roth IRA contributions are made with after-tax dollars, so you cannot deduct them. These contributions can create tax-free income in retirement if you meet the qualified withdrawal rules. Whether you are eligible to contribute to a Roth IRA depends on your modified adjusted gross income (MAGI) and filing status.
Roth IRA eligibility phases out based on your MAGI. Full contributions are allowed below the range, reduced contributions within it and no contributions above the range.
For 2026, the IRS raised the single and head-of-household phaseout range to $153,000-$168,000, and the married-filing-jointly range to $242,000-$252,000.
Note: $153,000 and $242,000 mark the start of the phaseout, not the cutoff for Roth IRA eligibility.
If your income exceeds the Roth IRA limit, a backdoor Roth IRA may be possible. However, pretax IRA balances and the pro-rata rule can affect taxes. See our article on the backdoor Roth IRA strategy before proceeding.
Eligibility to contribute to a traditional IRA and eligibility to deduct that contribution are two separate questions. Even if income prevents a full deduction, contributions themselves are still permitted.
Whether you can deduct your contribution generally depends on your filing status, MAGI and whether you or your spouse is covered by a workplace retirement plan.
If neither spouse has a workplace retirement plan, income-based phaseouts generally do not apply, and contributions are fully deductible. Roth IRA contributions are never deductible because they are made with after-tax dollars.
Nondeductible traditional IRA contributions create an after-tax basis in the account. Mixing deductible and nondeductible funds can complicate future withdrawals and backdoor Roth conversions, so keep accurate records.
Review our article on tax-efficient investing strategies for guidance on coordinating retirement accounts with taxable investments.
Reaching the IRS maximum is not always the best goal. Ultimately, the goal is to set yourself up for retirement, but it can be hard to know how much money you’ll need. Instead, ask if your contributions are sustainable and in line with your long-term tax situation. A practical approach includes:
The ideal contribution rate depends on age, retirement timetable, current savings, income stability and future pension or Social Security.
Suppose you earn $100,000 and aim for a 12% savings rate. You would save $12,000 annually. If paid biweekly across 24 pay periods, that means saving $500 per paycheck, before any employer match.
High earners, in particular, should evaluate whether pretax or Roth contributions are a better fit for their projected tax trajectory, rather than defaulting to one type based solely on the limit. Review our guide on tax planning for high-net-worth individuals for additional information.
Calculate your per-paycheck target. Divide your annual contribution goal by the number of remaining pay periods. To reach the $24,500 limit across 24 bimonthly pay periods, an employee under 50 would need to defer approximately $1,020.83 per paycheck.
Review percentage-based elections carefully. If contributions are set as a percentage of pay, variable compensation, such as bonuses or commissions, can cause your actual contributions to differ from your intended dollar amount.
Don’t max out too early if your employer matches per paycheck. Some employers match contributions each pay period. Reaching the annual limit early can result in forfeiting match dollars in the remaining pay periods unless the plan includes a year-end true-up provision.
Verify catch-up eligibility. Eligible participants aged 60-63 in 2026 should confirm whether payroll software is recognizing the $11,250 higher catch-up limit, not just the standard $8,000 amount.
Coordinate contributions across multiple jobs. The $24,500 employee deferral limit applies to the individual, not to each employer. Changing employers mid-year does not reset the limit. Exceeding it across multiple plans creates a correctable but time-sensitive problem.
Revisit your traditional versus Roth allocation. Maximizing the dollar amount and the tax impact matters. If you’re approaching peak earnings years, you may benefit from prioritizing pretax contributions. Those expecting higher future rates may prefer locking in today’s tax rates with Roth contributions.
Excess retirement contributions can result in taxes, penalties and additional reporting requirements. The correction process depends on the account type.
Excess IRA contributions typically result from exceeding the annual limit, contributing more than the eligible compensation, making a Roth contribution when MAGI is too high or miscalculating a reduced contribution within a phaseout range. If you leave an excess contribution uncorrected, you may have to pay a 6% excise tax for each year the excess remains in the account. To avoid this tax, the excess and any related earnings must be removed by the tax return due date, including extensions.
Recharacterization may be an available correction in certain IRA situations. Work with both the IRA custodian and a tax professional before withdrawing money or moving it between accounts.
Excess 401(k) contributions often occur when someone contributes to more than one workplace plan in the same year. To resolve the issue, you must notify the plan administrator and request a corrective distribution of the excess and any applicable earnings.
Excess 2026 deferrals should be resolved by April 15, 2027. Missing that deadline can result in double taxation and other complications.
Do not withdraw funds independently before confirming the correction procedure with the plan administrator. Self-directed withdrawals outside the correction process can create separate tax problems.
The increased 2026 contribution limits give many savers an opportunity to put more toward retirement. But the best strategy is not always as simple as contributing the maximum.
Before adjusting your contributions, review your:
Starting early makes it easier to spread contributions throughout the year and help prevent last-minute corrections.
LTax Consulting can help you coordinate your IRA and workplace-plan contributions with your income, investments and long-term financial goals. Contact our team to create a retirement savings strategy for 2026 and beyond.
What is the 401(k) contribution limit for 2026?
The employee elective-deferral limit is $24,500. Eligible participants aged 50 or older may contribute more through catch-up contributions: $8,000 for most, or $11,250 for those aged 60-63 during 2026.
Can I contribute to both a 401(k) and an IRA in 2026?
Yes, participating in a workplace plan does not prevent you from making an IRA contribution. However, income and workplace-plan coverage may limit or eliminate a traditional IRA deduction, and income above the Roth IRA phaseout range may prevent a direct Roth IRA contribution.
Is there an income limit for traditional IRA contributions?
There is generally no upper-income limit on making a traditional IRA contribution when the taxpayer has sufficient eligible compensation. However, income and workplace-plan coverage may reduce or eliminate the deductibility of that contribution.
What is the deadline for making a 2026 IRA contribution?
A 2026 IRA contribution can generally be made through the federal income-tax filing deadline, April 15, 2027, not including extensions. Workplace-plan employee deferrals must be made through payroll by the end of the applicable plan year.
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