Tax Planning
Maximizing Retirement Savings: 2026 401(k) & IRA Limit Changes
With 2026 rapidly approaching, new IRS limits for retirement contributions are here—learn how to adjust your planning to capture the full tax advantages.
By NomadicTax Research Team • 5-8 min read • November 19, 2025
## What’s New for 2026 Contributions
The IRS recently announced that starting in **2026**, the contribution limits for key retirement savings vehicles will increase: 401(k), 403(b), 457 plans, and the Thrift Savings Plan will be capped at **$24,500** (up from $23,500 in 2025), while the IRA limit rises to **$7,500** (from $7,000). Catch-up contributions also increase, especially for those aged **60–63**, who can still contribute up to **$11,250**. ([irs.gov](https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500?utm_source=openai))
## TAX PLANNING Strategies
* **Max out your contributions early.** With the increased limits, consider adjusting your payroll deferrals to take full advantage over the year—especially if you're salaried and anticipate raises or bonus payments.
* **Catch-up contributions matter.** If you're in your 60s, the higher catch-up thresholds allow for more tax-advantaged savings before retirement.
* **Plan for Roth vs. traditional contributions.** Depending on your income and tax rate expectations, contributing to a Roth may make sense now if you expect higher taxes later. IRA phase-out ranges are also increased. ([irs.gov](https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500?utm_source=openai))
## Examples in Action
| Scenario | Contribution Possible in 2025 | Contribution in 2026 | Additional Tax-Savings Opportunity |
|---|---|---|---|
| Age 45, single filer | $23,500 | $24,500 | $1,000 more pre-tax savings in 401(k) |
| Age 62, joined SIMPLE or 401(k) plan | $23,500 + catch-up $11,250 = $34,750 | unchanged catch-up but base up: total limit same catch-up + new base value |
> *Note:* If you’re close to the income phase-out ranges for IRAs or Roths, check where your MAGI (Modified Adjusted Gross Income) lands—these ranges increased too. ([irs.gov](https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500?utm_source=openai))
## Action Steps Before Year-End
1. Update your payroll deferral rates to reflect the new limits. 2. Review your IRA or Roth eligibility based on new phase-out thresholds. 3. Talk to your plan administrator about catch-up options if you're 50+. 4. Monitor your year-to-date contributions so you don’t overshoot the limits.
By adjusting now, you’ll make the most of these inflation adjustments—and secure more tax-advantaged savings for 2026.