Each year, the IRS adjusts contribution limits for retirement accounts to reflect the rising cost of living. These changes—known as Cost of Living Adjustments (COLA)—help workers and retirees keep pace with inflation and save more effectively for the future. On November 13, 2025, the IRS announced new limits that will impact retirement savers for the 2026 tax year.
2026 Cost of Living Adjustments
Below is a summary of the most notable changes for individuals and employers.
📈 Key Retirement Contribution Increases for 2026
| Account Type | 2026 Limit | 2025 Limit |
|---|---|---|
| Traditional & Roth IRA Contribution | $7,500 | $7,000 |
| IRA Catch-Up (50+) | $1,100 | $1,000 |
| 401(k), 403(b), & Similar Plans Employee Deferrals | $24,500 | $23,500 |
| 401(k) Catch-Up (50+) | $8,000 | $7,500 |
| SIMPLE IRA Maximum Contribution | $17,000 | $16,500 |
| SIMPLE Catch-Up (50+) | $4,000 | $3,500 |
🏦 New Income Thresholds for IRA Deductibility
Your ability to deduct IRA contributions may phase out depending on income and filing status.
| Filing Status | 2026 Range |
|---|---|
| Married Filing Jointly | $129,000–$149,000 |
| Single / Head of Household | $81,000–$91,000 |
👥 High Earners & Plan Sponsor Considerations
Several compensation limits are rising in 2026:
Annual Compensation Limit: $360,000 (up from $350,000)
Highly Compensated Employee Threshold (HCE): Remains at $160,000
Defined Contribution Limit: $72,000 (up from $70,000)
These changes may impact nondiscrimination testing and employer plan design.
🔎 Why These Changes Matter
Increasing limits gives individuals the opportunity to save more tax-advantaged money for retirement—particularly helpful during inflationary periods. Employers may also need to adjust plan operations, payroll systems, and employee communications to stay compliant.
If you’re unsure how these changes affect your retirement plan—or how to take full advantage of higher contribution limits—we’re here to help.
💬 Have questions about maximizing your contributions for 2026?
Contact Select Wealth Partners to review your retirement savings strategy.