401(k) Limits Rise to $24,500 in 2026 as New Roth Rules Take Effect for High Earners
The annual contribution limit for 401(k) plans increased to $24,500 in 2026, up from $23,500 in 2025. IRA limits also rose to $7,500. A new rule requires workers who earned more than $150,000 in FICA wages the prior year to make catch-up contributions as Roth contributions, meaning they pay taxes upfront rather than at withdrawal.
Workers saving for retirement got a boost in 2026 as contribution limits for 401(k) plans and IRAs increased.
The annual contribution limit for 401(k), 403(b), governmental 457 plans, and the federal Thrift Savings Plan rose to $24,500, up from $23,500 in 2025. IRA contribution limits increased to $7,500, up from $7,000.
Catch-up contributions also changed. Workers aged 50 or older can contribute an additional $8,000 to 401(k), 403(b), and 457 plans. Those aged 60 to 63 can contribute an extra $11,250 on top of the standard limit. IRA catch-up contributions allow an additional $1,100.
A new rule for 2026 affects high earners. If a worker's prior-year Federal Insurance Contributions Act wages exceeded $150,000, catch-up contributions must now be made as Roth contributions. That means the money is taxed upfront, but gains and withdrawals in retirement are tax-free.
Financial advisers say the change is significant for workers in their peak earning years who might otherwise prefer to defer taxes through traditional pre-tax contributions.
Health Savings Account limits also increased. Individuals can contribute up to $4,300, and families can contribute up to $8,550. HSAs offer a triple tax advantage: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free.
Experts recommend workers review their contribution levels at the start of each year and adjust payroll deductions to take full advantage of employer matching programs.
The federal estate tax exemption also increased to $15 million per individual, or $30 million for married couples, starting in 2026. The annual gift tax exclusion rose to $19,000 per recipient, or $38,000 for married couples giving jointly.
Workers who are unsure how the new rules apply to their situation should consult a financial adviser or tax professional.
