Attention all savers and future retirees! The Internal Revenue Service (IRS) has just announced an increase in the amount you can stash away in your 401(k) plans for 2026. At Leading Retirement Solutions, we are here to assist you in making the most of this opportunity.
Retirement Plan Maximum Contributions:
401(k) contributions are one of the easiest and most cost-effective ways for employees to save for retirement. Each year, the IRS reviews and adjusts the maximum contributions that can be made to 401(k), 403(b), Cash Balance, and other types of retirement plans, often increasing what owners and employees can contribute to a plan for retirement savings and tax deductions.
Contribution Highlights for 2026:
- $24,500 – The contribution maximum for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan.
- $7,500 – The contribution maximum for employees who participate in IRAs. The IRA catch-up contribution limit for individuals aged 50 and over was amended under the SECURE 2.0 Act of 2022 (SECURE 2.0) to include an annual cost-of-living adjustment is increased to $1,100, up from $1,000 for 2025.
- Employees aged 50+ can contribute up to $32,500 to most 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan, with a $8,000 catch-up limit. Those aged 60-63 have a higher catch-up limit of $11,250.
- *New for 2026* Roth Deferral Catch Up Requirement for “Highly Paid Individuals”: Catch-up eligible employees with FICA compensation in the prior year (2025) above $150,000 will have to use Roth Deferral for their catch-up contributions.
- Reminder: the “Highly Paid Individual” (HPI) definition is different from the compliance testing definition for “Highly Compensated Employee” (HCE).
| 2026 | 2025 | 2024 | ||||
| 401(k), 403(b), Profit-Sharing Plans, 457 etc. | ||||||
| Annual Compensation for Contributions | 360,000 | 350,000 | 345,000 | |||
| Elective Deferrals | 24,500 | 23,500 | 23,000 | |||
| Catch-up Contributions | 8,000 | 7,500 | 7,500 | |||
| Defined Contribution Maximum | 72,000 | 70,000 | 69,000 | |||
| ESOP Contribution Maximum (Account balance/Lengthening determination) | 1,455,000 /290,000 | 1,415,000 /280,000 | 1,380,000 /275,000 | |||
| Other | ||||||
| HCE Threshold (Highly Compensated Employee) | 160,000 | 160,000 | 155,000 | |||
| HPI Threshold (Highly Paid Individual) | 150,000 | – | – | |||
| Defined Benefit Maximum | 290,000 | 280,000 | 275,000 | |||
| Key Employee | 235,000 | 230,000 | 220,000 | |||
| Control Employee (board member or officer) | 145,000 | 140,000 | 135,000 | |||
| Control Employee (compensation-based) | 290,000 | 285,000 | 275,000 | |||
| Taxable Wage Base | 184,500 | 176,100 | 168,600 | |||
| IRAs | ||||||
| IRA Contribution Maximum | 7,500 | 7,000 | 7,000 | |||
| IRA Catch-Up Contributions | 1,100 | 1,000 | 1,000 | |||
| Traditional IRA AGI Deduction Phase-out Starting at | ||||||
| Joint Return | 129,000 | 126,000 | 123,000 | |||
| Single or Head of Household | 81,000 | 79,000 | 77,000 | |||
| SEP IRA | ||||||
| SEP Minimum Compensation | 800 | 750 | 750 | |||
| SEP Maximum Contribution | 72,000 | 70,000 | 69,000 | |||
| SEP Maximum Compensation | 360,000 | 350,000 | 345,000 | |||
| SIMPLE IRA | ||||||
| SIMPLE Maximum Contributions | 17,000 | 16,500 | 16,000 | |||
| SIMPLE Catch-up Contributions | 4,000 | 3,500 | 3,500 | |||
Additional information can be found here.
2026 Social Security Cost of Living Adjustment (COLA) Rates
SSA announced an increase of 2.8 percent for Social Security payouts. The cost-of-living adjustment (COLA) will begin with benefits payable to nearly 71 million Social Security beneficiaries in January 2026. Increased payments to nearly 7.5 million SSI recipients will begin on December 31, 2025. (Note: some people receive both Social Security and SSI benefits)
These updates underscore the importance of planning for retirement and maximizing your contributions while you can. As we approach 2026, it’s a perfect time to review your retirement strategy and make sure you’re taking full advantage of these increased limits. Remember, every dollar you save today is a step toward a secure and comfortable retirement tomorrow. Schedule a personalized consultation with us or reach out directly at 206-430-5084 to start the conversation today.
For tips and information regarding retirement plans, contact us.
