WASHINGTON, D.C. — The Internal Revenue Service last week unveiled a sweeping set of cost-of-living adjustments that will raise how much Americans can save tax-free for retirement in 2026 — including a higher 401(k) limit, larger IRA deductions, and expanded income ranges for Roth eligibility.
The announcement, detailed in Notice 2025-67, boosts the annual 401(k) contribution limit to $24,500, up from $23,500 for 2025, marking another year of increases as inflation and wage growth continue to reshape the retirement landscape.
The IRS also raised the annual IRA contribution cap to $7,500, with an expanded $1,100 catch-up allowance for savers age 50 and older, reflecting automatic cost-of-living adjustments enacted under the SECURE 2.0 Act.
Workers 50 and older contributing to 401(k), 403(b), 457, and Thrift Savings Plan accounts will now be able to save up to $32,500 per year when combining base and catch-up contributions. A separate SECURE 2.0 provision keeps the enhanced $11,250 catch-up limit in place for workers ages 60 to 63.
Roth IRA income eligibility thresholds are also rising. In 2026, singles and heads of household can make full or partial Roth contributions until their incomes fall between $153,000 and $168,000, while married couples filing jointly face a phase-out between $242,000 and $252,000.
Income limits for the Saver’s Credit, a benefit for low- and moderate-income workers, also increased — now capped at $80,500 for joint filers, $60,375 for heads of household, and $40,250 for single filers.
SIMPLE retirement accounts will see their contribution limit rise to $17,000, with a higher cap of $18,100 available under certain SECURE 2.0 rules. The general SIMPLE catch-up limit increases to $4,000.
In addition to the new retirement thresholds, the IRS confirmed that interest rates on overpayments and underpayments will hold steady for the first quarter of 2026. Individuals will continue to face a 7% rate on both overpayments and underpayments, while corporations will see a 6% rate for overpayments and 9% for large underpayments.
Interest rates are adjusted quarterly and are tied to the federal short-term rate, plus additional percentage points as required under the tax code.
Full details on all retirement-related adjustments for 2026 are available in Notice 2025-67 and Revenue Ruling 2025-22, posted on IRS.gov.
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