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The IRS has introduced new 401(k) catch-up contribution limits for 2026.
In its release on Thursday, the company elevated the 401(k) contribution limit to $24,500 for 2026, from $23,500 this 12 months. Catch-up contributions for savers age 50 and older can even enhance, to $8,000, up from $7,500 in 2025.
The boundaries apply to 401(ok)s, 403(b)s and most 457 plans, together with the federal Thrift Financial savings Plan.
The 401(ok) catch-up contributions are even higher for savers age 60 to 63, due to a change enacted through the Secure 2.0 retirement legislation. The catch-up contribution for these buyers will stay at $11,250 in 2026, permitting them to contribute as much as $34,750 in whole.
The IRS additionally launched new individual retirement account limits for 2026, amongst different updates.
Nonetheless, most workers aren’t maxing out their 401(ok) or common catch-up contributions, in keeping with Vanguard’s 2025 How America Saves report, which is predicated on greater than 1,400 plans and practically 5 million members.
In 2024, practically all Vanguard plans provided catch-up contributions, however only 16% of eligible workers made these deferrals, the report discovered.
The IRS announcement comes hours after President Donald Trump signed into law a funding invoice to finish the longest federal authorities shutdown in U.S. historical past. It additionally comes roughly a month after the company launched dozens of inflation changes for 2026, together with federal income tax brackets, larger capital gains brackets and provisions affecting families, amongst others.
