The IRS just released Notice 2025-67 and IR-2025-111, announcing new cost-of-living adjustments for retirement plans in 2026. These changes raise higher savings ceilings across 401(k)s, IRAs, SIMPLE plans, and other retirement accounts, creating new opportunities for tax-advantaged planning.
For high-income earners, business owners, and technology professionals with equity compensation, understanding these new thresholds isn't just about saving more; it's about optimizing every dollar of deferred income before limits reset again in future years.
Here's how the 2026 retirement plan limits compare to 2025.
| Retirement Plan or Limit | 2025 Limit | 2026 Limit | Change |
|---|---|---|---|
| 401(k), 403(b), 457(b), TSP elective deferral | $23,500 | $24,500 | +$1,000 |
| Catch-up contribution (age 50+) | $7,500 | $8,000 | +$500 |
| "Super" catch-up (age 60-63) | $11,250 | $11,250 | Unchanged |
| Roth catch-up mandatory above compensation of $150,000 | $145,000 threshold | $150,000 threshold | +$5,000 |
| Defined contribution plan annual additions (Sec 415 c) | $70,000 | $72,000 | +$2,000 |
| Defined benefit annual benefit (Sec 415 b) | $280,000 | $290,000 | +$10,000 |
| SIMPLE IRA or SIMPLE 401(k) elective deferral | $16,500 | $17,000 | +$500 |
| SIMPLE "enhanced" limit (certain employers) | $17,600 | $18,100 | +$500 |
| SIMPLE catch-up (age 50+) | $3,500 | $4,000 | +$500 |
| IRA annual contribution | $7,000 | $7,500 | +$500 |
| IRA catch-up (age 50+) | $1,000 | $1,100 | +$100 |
| Roth IRA income phase-out (single/HOH) | $150k - $165k | $153k - $168k | +$3k |
| Roth IRA income phase-out (married joint) | $236k - $246k | $242k - $252k | +$6k |
| IRA deduction phase-out (single covered) | $79k - $89k | $81k - $91k | +$2k |
| IRA deduction phase-out (MFJ covered) | $126k - $146k | $129k - $149k | +$3k |
| Highly compensated employee threshold | $160,000 | $160,000 | No change |
| Annual compensation limit (Sec 401a 17) | $350,000 | $360,000 | +$10,000 |
The employee deferral limit for 2026 increases to $24,500, representing a $1,000 rise. Participants age 50 and older can contribute an additional $8,000, bringing their total elective deferral to $32,500.
Those ages 60 to 63 still qualify for the "super catch-up" of $11,250, introduced under SECURE 2.0. High-income earners whose wages exceed $150,000 must make catch-up contributions as Roth contributions, meaning after-tax dollars that grow tax-free.
For executives and business owners in peak earning years, the combination of higher deferral and catch-up limits means $72,000 - $80,000 of potential pre-tax savings when combined with employer matches and profit-sharing contributions. Integrating these with Mega Backdoor Roth conversions remains a decisive advanced planning move.
For 2026, the IRA contribution limit increases to $7,500, while the catch-up for those 50+ rises to $1,100 - the first inflation-indexed increase under SECURE 2.0.
Phase-out ranges are also moving higher:
These increases create more flexibility for backdoor Roth IRA strategies, particularly for dual-income households near the prior phase-out limits. If your income has hovered just above the Roth eligibility threshold, 2026 may offer renewed access without triggering phase-outs.
Business owners using SIMPLE IRAs or SIMPLE 401(k) plans will see their elective deferral limit increase to $17,000, with a $4,000 catch-up contribution available for those aged 50 and older. Certain employers under SECURE 2.0 can offer enhanced SIMPLE limits up to $18,100 for 2026.
SEP plan compensation thresholds also tick up to $800, ensuring eligibility aligns with wage growth.
For solo entrepreneurs or small professional practices, these incremental boosts compound meaningfully. When paired with a Solo 401(k) or Cash Balance plan, total deductible retirement contributions can often exceed $200,000 per year - dramatically reducing adjusted gross income.
The defined benefit plan limit increases to $290,000 in 2026, allowing high-income professionals to shelter even greater pre-tax amounts through customized pension arrangements.
Other notable thresholds:
These subtle shifts help maintain the tax advantages of qualified plan participation even as wages rise with inflation.
Under SECURE 2.0, employees earning over the Roth catch-up threshold ($150,000 in 2026) must make all catch-up contributions to the Roth side of their plan.
This rule doesn't affect regular deferrals but does alter the tax character of the catch-up. For many executives, this can be beneficial, allowing for tax-free compounding and hedging against future rate hikes.
However, plan administrators and payroll teams must confirm systems can track and report these Roth designations correctly by January 1, 2026.
At VIP Wealth Advisors, we routinely model these integrated strategies, factoring in AMT and QBI deductions, as well as long-term tax diversification, so that clients can maximize the benefits of rising contribution ceilings.
Inflation adjustments are easy to overlook, but each year's incremental change represents another lever in your long-term wealth plan.
By increasing retirement deferrals and proactively coordinating tax-advantaged accounts, high-income professionals can build retirement readiness while lowering their current-year taxes.
If you're unsure how these new limits affect your 2026 plan contributions, it's time for a personalized review.
VIP Wealth Advisors specializes in advanced retirement and equity compensation planning for top-earning professionals and business owners across the nation.
Schedule your 2026 contribution strategy review today.
The employee deferral limit for 401(k), 403(b), 457(b), and TSP plans is $24,500, up from $23,500 in 2025.
The standard catch-up rises to $8,000, allowing a total contribution of $32,500 in 2026.
Yes. Eligible participants can contribute up to $11,250 as a catch-up during those years.
The annual IRA limit increases to $7,500, with a $1,100 catch-up for those 50 and older.
Yes. You can contribute to both, subject to income-based deduction limits for traditional IRAs.
$153,000 - $168,000 for single filers; $242,000 - $252,000 for married couples filing jointly.
If your W-2 wages exceed $150,000 in 2026, all 401(k) catch-up contributions must be made as Roth.
$17,000 for 2026, with a $4,000 catch-up ($18,100 for eligible enhanced SIMPLEs).
By pairing higher 401(k) limits with profit-sharing or defined benefit plans, owners can defer six figures of income while accelerating long-term wealth accumulation.
These new IRS limits open the door to larger deferrals, smarter Roth strategies, and advanced plan designs that can materially cut your tax bill. The key is coordinating all of your 401(k), IRA, and business retirement plans before the year is half over.
If you're a high-income earner, business owner, or tech professional with equity compensation, let's map out a 2026 contribution strategy that fully leverages the new ceilings while keeping your tax exposure in check.