Hit $24,500: Your 2026 Max 401(k) Contribution Guide

The IRS retirement limit increases for 2026 provide a great opportunity to grow your tax-advantaged savings. These changes, released in Notice 2025-67, are particularly important for high-income earners and savers over the age of 50.

Here is a guide on how to immediately take advantage of the new 2026 contribution limits and phase-out changes.

Maximizing Your Core Contributions

The first step is updating your automatic contribution amounts to reflect the higher ceilings.

1. Increase Your 401(k) Contribution Immediately

The limit for most workplace plans (401(k), 403(b), 457) has jumped by $1,000 to $24,500 for 2026.

• Action Plan: If you were maxing out your 401(k) at the 2025 limit of $23,500, you need to contact your HR department or plan administrator now to adjust your payroll contributions. You should aim to contribute the full $24,500 over 26 paychecks to avoid "front-loading" and missing out on future employer matching contributions later in the year.

2. Boost Your IRA Savings

The limit for Traditional and Roth IRAs has increased by $500 to $7,500.

• Action Plan: Whether you contribute via monthly bank transfer or a lump sum, increase your annual contribution plan to meet the new $7,500 ceiling. Remember, IRA contributions can be made up until the April tax deadline for the prior year, giving you more flexibility.

Leveraging the Catch-Up and Eligibility Changes

These specific changes are designed to benefit two groups: older workers and individuals whose income was previously too high.

1. The 50+ Catch-Up Strategy

If you are aged 50 or older, you benefit from two levels of catch-up contributions:

• Action Plan: If you fall into the 60-63 age bracket, utilize the higher $11,250 limit to get the highest possible tax deduction. The IRA catch-up also increases to $1,100, making your total max IRA contribution $8,600.

2. Maximizing Roth IRA Eligibility

The income phase-out ranges for Roth IRA contributions have increased significantly, meaning thousands of couples and individuals who were previously blocked can now contribute:

• Married Filing Jointly: The phase-out begins $6,000 higher (starting at $242,000).
• Singles: The phase-out begins $3,000 higher (starting at $153,000).
• Action Plan: If your income was near the 2025 limit, check your eligibility again for 2026. Even a small increase in the phase-out can restore your ability to contribute to this valuable tax-free account.

Using the Saver's Credit

The income limits for the Saver's Credit (a tax credit for low- and moderate-income retirement savers) have also increased.

• Action Plan: If your income is near the new ceilings (e.g., up to $80,500 for married couples filing jointly), ensure you contribute to a 401(k) or IRA. The Saver's Credit provides a direct reduction of the tax you owe, making it one of the most powerful tax incentives for saving.

Conclusion: Time to Adjust Your Paycheck

The IRS updates for 2026 are not just technical changes; they represent a significant opportunity to shield more of your income from taxes and increase your tax-free growth. The single most important action you can take right now is to stop delaying and adjust your contributions.

• The Immediate Step: Contact your employer's HR department or log into your plan administrator's portal today. Set your 401(k) contribution percentage to ensure you hit the full $24,500 maximum over the 2026 tax year.
• The Age Advantage: If you are aged 50 or older, be sure to utilize the $8,000 standard catch-up, or the higher $11,250 limit if you fall into the 60-63 bracket.
• The Eligibility Check: If you were previously phased out of Roth IRA contributions, run your numbers again. The increased income limits might have restored your ability to contribute to this powerhouse of tax-free growth.

Don't let these valuable tax-advantaged slots go unfilled. Every dollar you contribute below the maximum is lost forever.