2026 Retirement Account Limits Raised

The IRS has released its updated contribution limits for retirement accounts in tax year 2026—offering Americans the opportunity to save more before taxes and giving you, as tax professionals, new angles for advising clients. Notice 2025-67 details the changes. Below is a breakdown of the key updates, why they matter, and how you should act now to support your clients.

Key Limit Changes for 2026

• The deferral limit for most 401(k), 403(b), and governmental 457 plans rises to $24,500, up from $23,500 in 2025.

  
  

• For individual retirement accounts (IRAs) the contribution cap increases to $7,500, up from $7,000.

  
  

• Catch-up contributions:

  • For 401(k) plans and similar for participants aged 50 +: the limit grows to $8,000 (versus $7,500 in 2025) for most plans.

  • For certain participants ages 60-63 in qualified plans under the SECURE 2.0 Act who are eligible for the “higher catch-up” threshold: remains at $11,250 for 2026.

    
    

• Income phase-out ranges for traditional and Roth IRA contributions have also increased. For example: single filers covered by retirement plans now phase out between $81,000–$91,000, up from $79,000–$89,000 in 2025.

  
  

Why It Matters for Tax Pros

1. Planning Opportunity for Clients: Higher limits mean you can help clients optimize their contributions this year—and carry more into retirement. Clients who routinely max out or near the limits will benefit most.

2. Older Savers Need Attention: Clients 50+ (especially 60-63) can now contribute more. Review their plan type and timing—especially if they plan to take full advantage of catch-up allowances.

3. Educating Clients Who Don’t Max Out: Many clients aren’t contributing up to limits. Use these changes as a conversation starter: show how increasing contributions might impact tax liability, retirement readiness, and savings strategy.

Action Steps to Take This Week

• Update your planning templates with the new 2026 limits.

  
  

• Identify clients who are already contributing near or at the old limits — these will be high-impact opportunities.

  
  

• Communicate to clients (via newsletter/email) that the limits were raised and offer a review of their contributions and retirement strategy.

  
  

• For clients approaching age 50 or within the 60-63 super catch-up tier, map out how their contribution strategy changes next year.

  
  

• Review clients who may be subject to phase-out thresholds for traditional or Roth IRAs and advise accordingly.

  
  

Final Thoughts

The IRS’s increase in retirement-account contribution limits for 2026 signals another important shift in how Americans can save for retirement and how tax professionals must advise them. For you and your practice, staying ahead means not just knowing the numbers—but guiding clients to take advantage of them.

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Disclaimer: This article is for informational and educational purposes only and does not constitute legal tax advice. Advanced Tax Solutions is not liable or responsible for any damages resulting from or related to your use of this information. It is your responsibility to refer to official IRS documentation for information regarding any tax laws or tax information shown here.