The IRS has released the 2026 cost-of-living adjustments for retirement plans. These updates outline new contribution and compensation limits that apply to qualified retirement plans beginning in 2026. The information below is provided as a general reference to help individuals and employers stay informed about regulatory changes.
Key Updates for 2026
- 401(k) Elective Deferral Limit: The maximum employee contribution to a 401(k) plan will increase to $24,500, up from $23,500.
- Catch-Up Contributions: For participants aged 50 or older, the catch-up contribution limit will rise to $8,000. Individuals aged 60 to 63 may contribute up to $11,250 under the enhanced catch-up provision.
- Annual Additions Limit for Defined Contribution Plans: The total amount that can be contributed to a defined contribution plan, including employee deferrals and employer contributions, will increase to $72,000, up from $70,000.
- Maximum Compensation Considered: The maximum annual compensation that may be used when calculating plan contributions will increase to $360,000, up from $350,000.
Important Note for Employers and Individuals
Plan rules, eligibility, and application of these limits can vary by employer and by plan design. Legacy does not provide tax advice or individualized guidance regarding contribution limits.
For questions about how these updated IRS limits apply to your specific retirement plan, please contact your HR department, plan administrator, or tax advisor.
