How the New 401(k) and IRA Limits Affect Your Retirement Planning Strategy

The IRS has announced new retirement account contribution limits taking effect in 2026, giving Americans more room to save—especially those nearing retirement. These increases reflect longer life expectancies, rising costs, and a continued push to help workers build more secure retirements. While the changes create new opportunities, they also introduce added complexity, particularly for high earners subject to new Roth requirements on catch-up contributions.

Why Contribution Limits Matter

Retirement accounts like IRAs and 401(k)s offer tax advantages that boost long-term savings.

Traditional accounts use pre-tax contributions and offer tax-deferred growth.
Roth accounts use after-tax contributions but provide tax-free growth and withdrawals.

The IRS limits determine how much you can invest in these tax-advantaged vehicles each year, making every increase meaningful for long-term planning.

IRA Changes for 2026

Under age 50: Contribution limit increases from $7,000 (2025) to $7,500.
Age 50+: Catch-up contribution increases from $1,000 to $1,100, raising the total to $8,600.
The catch-up increase is the first in years, thanks to SECURE 2.0’s new cost-of-living adjustments.

Updated Income Phase-Outs

Traditional IRA deduction (covered by a workplace plan):
- Single: $81,000–$91,000
- Married filing jointly: $129,000–$149,000
Roth IRA eligibility:
- Single/Head of household: $153,000–$168,000
- Married filing jointly: $242,000–$252,000

Higher limits allow more savers to qualify for contributions or deductions.

401(k) and Workplace Plan Updates

Under age 50: Limit rises from $23,500 to $24,500.
Age 50+: Catch-up increases from $7,500 to $8,000, raising the total to $32,500.

Special Enhanced Catch-Up (Ages 60–63)

A major SECURE 2.0 change allows workers aged 60–63 to contribute an additional $11,250 in 2026.

Total potential contribution: $35,750.
This recognizes that many workers in their early 60s are in peak earning years and may need to boost savings quickly.

Mandatory Roth Catch-Ups for High Earners

Starting in 2026, anyone earning more than $150,000 must make all catch-up contributions to a Roth 401(k)/403(b)/457 plan.

Only affects amounts above the $24,500 base limit.
If your employer doesn’t offer a Roth option, you temporarily cannot make catch-up contributions.
High earners should prepare for higher current-year taxes, though Roth contributions provide tax-free growth.

Strategic Planning for 2026

Maximize new limits by adjusting payroll elections early.
High earners should confirm their plan’s Roth availability and review tax withholding.
Even if you can’t max out contributions, increasing your savings rate—even modestly—creates meaningful long-term impact through compounding.

Coordinating Multiple Accounts

You can contribute to both an IRA and a 401(k), but IRA limits apply across all IRAs combined.

2026 IRA maximums:
- Under 50: $7,500 total
- Age 50+: $8,600 total

Prioritize employer match, compare investment options, and decide whether traditional or Roth contributions better fit your tax strategy.

Practical Steps Before 2026

Review your 2025 contributions.
Verify Roth availability in your workplace plan.
Meet with financial/tax advisors to understand how new limits and Roth rules affect you.
Update payroll contributions in early 2026 and monitor them throughout the year.

The Bigger Picture

These increases reflect the financial realities of longer retirements and rising costs. Even if you don’t max out contributions, consistent investing matters more than hitting the upper limit.

How HTB Wealth Advisors Can Help

Ready to make the most of these new opportunities? At HTB Wealth Advisors, we specialize in helping clients navigate changing retirement rules and optimize their savings strategies. Whether you’re planning for the long term or approaching retirement, our team can guide you through contribution limits, tax implications, and personalized investment options.