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Investing.com -- The Internal Revenue Service (IRS) announced Thursday that the contribution limit for 401(k) plans will increase to $24,500 in 2026, up from $23,500 in 2025.
The IRS also raised the annual contribution limit for Individual Retirement Arrangements (IRAs) to $7,500, a $500 increase from the current $7,000 limit. These changes are part of the cost-of-living adjustments detailed in Notice 2025-67.
For employees aged 50 and over, the catch-up contribution limit for most 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan will rise to $8,000, up from $7,500. This means older participants can contribute up to $32,500 annually starting in 2026.
A special provision from the SECURE 2.0 Act maintains a higher catch-up contribution limit of $11,250 for employees aged 60 through 63.
The IRS also adjusted income phase-out ranges for traditional IRA deductions. For single taxpayers covered by workplace retirement plans, the phase-out range will increase to between $81,000 and $91,000. Married couples filing jointly will see their phase-out range rise to between $129,000 and $149,000 when the spouse making the contribution is covered by a workplace plan.
For Roth IRA contributors, the income phase-out range will increase to between $153,000 and $168,000 for singles and heads of household, and to between $242,000 and $252,000 for married couples filing jointly.
The contribution limit for SIMPLE retirement accounts will increase to $17,000, up from $16,500. Certain applicable SIMPLE retirement accounts will have a higher limit of $18,100.
The income limit for the Saver’s Credit, which benefits low- and moderate-income workers, will rise to $80,500 for married couples filing jointly, $60,375 for heads of household, and $40,250 for singles and married individuals filing separately.
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