The IRS has just announced the 2026 contribution limits and income thresholds for retirement accounts. This update serves as a great reminder to check whether your saving strategy still fits your goals. These changes might seem small, but over time, they can make a meaningful difference in how much you are able to set aside and how efficiently you do it.
Starting in 2026, you will be able to contribute up to $24,500 to your 401(k), 403(b), or similar employer plan, up from $23,500 this year. IRA limits are also rising to $7,500, and income thresholds for both traditional and Roth IRAs are moving higher. For anyone 50 or older, catch-up contributions continue to provide an extra opportunity to accelerate savings in those final working years. Catch-up contributions allow older workers to add more to their accounts beyond the standard limits, helping to make up for any earlier years when savings might have been lower due to other financial priorities.
The catch-up contribution limits have also increased. The IRA catch-up is increasing to $1,100 for a total of $8,600 in 2026. The 401(k), 403(b), or similar employer plan catch-up has increased to $8,000 for a total of $32,500 in 2026. If you recall the change made under the SECURE 2.0 Act, a higher catch-up contribution was enacted for employees aged 60 to 63. The higher catch-up is $11,250, which enables those who fall into the required age band to contribute a maximum of $35,750. This provision recognizes that many people in their early 60s may be in peak earning years and can benefit from additional tax-advantaged savings to bolster retirement security.
Here is an important detail for higher-income participants. For employees whose Social Security wages (Box 3 on the W-2) in the prior year exceed $145,000, any catch-up contributions made in their employer-sponsored plan must be designated as Roth contributions only. They cannot be made on a pre-tax basis. This rule applies to 401(k) plans, 401(a), 403(b), and 457(b) plans, and it begins for plan years starting in 2026. In essence, if you are a high earner, you will want to review how your catch-up deferrals are entering your plan. Roth contributions are made with after-tax dollars but grow tax-free, which can be advantageous if you expect to be in a higher tax bracket during retirement or want to minimize required minimum distributions.
At LeConte Wealth, this is exactly the kind of update that fits into our Purpose-Built Planning process. We do not just look at contribution limits and tax brackets. We look at how each change connects to your broader financial story. A slightly higher contribution limit might not seem like much, but when it is aligned with your tax strategy, cash flow, and retirement goals, it can help you take another meaningful step toward long-term financial freedom. Our approach emphasizes education on these topics to ensure clients understand the “why” behind adjustments, turning compliance updates into personalized opportunities.
These changes are a reminder to be intentional. The extra room in your retirement accounts gives you more tax-advantaged runway to work with. If you are already maxing out, this is your cue to bump up your contribution percentage, so you do not leave money on the table in 2026. If you are not quite there yet, it is a good time to explore a small increase that still fits comfortably within your spending/savings plan. Starting small can compound over time, thanks to tax-deferred or tax-free growth in these accounts.
For higher earners, the rising income thresholds make it worth re-evaluating whether Roth contributions or conversions still make sense. As income grows, eligibility can shift, and proactive adjustments can have a big impact on future tax flexibility. For example, Roth options provide tax diversification, allowing you to withdraw funds tax-free in retirement and potentially reduce your overall tax burden.
As part of our Purpose-Built Planning approach, we will be walking clients through these updates to make sure their saving, tax, and investment strategies stay aligned with what matters most to them. The goal is not just to save more. It is to save with purpose, clarity, and confidence. If you would like to review how these new limits affect your plan or explore ways to take advantage of them heading into 2026, now is the perfect time to start that conversation.
