TL;DR: The IRS increased 401(k) and IRA contribution limits for 2026. The employee 401(k) deferral limit rises to $24,500, the standard catch-up for employees 50 and older increases to $8,000, and the SECURE 2.0 super catch-up for ages 60 to 63 stays at $11,250. The IRA limit increases to $7,500. Employers should update payroll deferral caps and confirm their plan documents allow the SECURE 2.0 catch-up provisions before the new limits take effect.
Every year the IRS adjusts 401(k) and IRA contribution limits, and 2026 brings another increase. If you sponsor a retirement plan, the 2026 401(k) contribution limits affect more than employee savings. They change what your payroll system caps, what your plan documents allow, and what your team should hear from you before contributions start under the new numbers. Retirement limits are one more compliance detail on top of the payroll and benefits rules employers already juggle, which is why many small businesses lean on a PEO partner to help manage benefits and payroll compliance instead of tracking every IRS update alone.
Why the IRS Raises Retirement Limits Every Year
The IRS does not raise 401(k) and IRA limits on a whim. Most years, the increase is tied to a cost of living adjustment, which accounts for inflation using a wage and price index the agency reviews every fall. For 2026, that adjustment pushed the 401(k) elective deferral limit, the IRA limit, and both catch-up amounts higher than 2025. None of this happens automatically inside your payroll system. Someone has to update the caps, and that is usually you or your payroll provider.
What Changed for 401(k) Contribution Limits in 2026
For 2026, employees can defer up to $24,500 into a 401(k), up from $23,500 in 2025. That is the elective deferral limit, meaning the cap on what an employee can contribute from their own paycheck before counting any employer match. The combined limit for employee and employer contributions together also rose, climbing to $72,000 for 2026, up from $70,000. This same $24,500 deferral limit applies across 401(k), 403(b), and most governmental 457 plans, along with the federal Thrift Savings Plan.
What Changed for IRA Contribution Limits in 2026
The 2026 IRA contribution limit is $7,500, up from $7,000 in 2025. This figure applies across traditional and Roth IRAs combined, not per account, so an employee cannot contribute the full amount to each type separately. It is worth reminding your team that this limit is entirely separate from their 401(k) deferral limit, so someone can max out both in the same year.
Standard Catch-Up Contributions Explained
Employees age 50 and older can contribute an extra $8,000 on top of the standard 401(k) deferral limit in 2026, up from $7,500 the year before. That brings their total possible 401(k) contribution to $32,500 for the year. This provision exists because the IRS recognizes that people closer to retirement often need to save more aggressively, and it applies once an employee reaches the qualifying age, as long as the plan allows catch-up contributions.
The SECURE 2.0 Super Catch-Up for Ages 60 to 63
Employees turning 60, 61, 62, or 63 during the year get access to a higher catch-up amount under SECURE 2.0, sometimes called the super catch-up. For 2026, that figure holds at $11,250 instead of the standard $8,000, bringing total possible contributions for that age group to $35,750. Plans are not required to offer this automatically. They have to formally adopt it, so employers should confirm with their plan administrator that the plan document actually permits the SECURE 2.0 super catch-up before telling employees they can use it.
What Employers Actually Need to Do Before the New Limits Take Effect
The list here is short but easy to overlook. Update your payroll system so deferral percentages calculate against the new $24,500 cap and stop contributions automatically once an employee hits it. Confirm your plan document allows the SECURE 2.0 super catch-up if you want employees ages 60 to 63 to use it, since silence in the plan document means the higher amount is not available even if the IRS permits it. Then communicate the new numbers to your team early, before the plan year starts.
Retirement plan compliance rarely stands alone. If your business is also working through other 2026 payroll updates, our guide on staying compliant with South Carolina’s 2026 payroll laws covers several other changes worth reviewing at the same time.
What Happens If Payroll Doesn’t Update the Limits in Time
If your payroll system is still capping deferrals at the 2025 numbers, employees are simply saving less than they are allowed to, which is a missed opportunity but not a compliance failure. The bigger risk runs the other direction. If a system error lets contributions run past the legal limit, the correction process is far more involved: excess deferrals need to be identified, returned to the employee, and reported correctly, and depending on timing that can mean amended W-2s. Catching the limit update in payroll before the plan year gets underway avoids all of it.
A Quick Note on State Rules and Getting Help
Federal limits are only part of the picture. A growing number of states run their own auto IRA mandates for employers who do not sponsor a plan, and those rules vary by location. Confirm your state’s specific requirements alongside these federal limits, since this article covers compliance information rather than legal advice.
Frequently Asked Questions
What are the 2026 401(k) contribution limits?
For 2026, employees can defer up to $24,500 into a 401(k), up from $23,500 in 2025. Workers 50 and older can add a catch-up contribution on top of that. Review your plan documents against the new IRS numbers before year end.
What is the IRS 401(k) limit for 2026?
The IRS set the 2026 elective deferral limit at $24,500, the cap on what an employee can contribute from their own paycheck before counting employer matches. Employers should update payroll system caps so contributions stop automatically once an employee hits the limit.
Did 401(k) contribution limits increase in 2026?
Yes. The employee deferral limit, the standard catch-up amount, and the combined contribution limit all went up from 2025. Employers should share the new numbers with staff early in the year.
What are the 2026 IRA contribution limits?
The 2026 IRA contribution limit is $7,500, up from $7,000 in 2025, across traditional and Roth IRAs combined. Employees saving in both a 401(k) and an IRA should know these are separate limits.
What is the catch-up contribution limit for 2026?
Employees age 50 and older can add an extra $8,000 on top of the standard 401(k) deferral limit, bringing their total to $32,500. A separate, higher catch-up applies to employees ages 60 through 63 under SECURE 2.0.
What is the SECURE Act 2.0 catch-up contribution?
SECURE 2.0 created a higher super catch-up for employees turning 60, 61, 62, or 63 in a given year. For 2026, that amount is $11,250 instead of the standard catch-up. Plans must formally adopt this provision to offer it, so employers should confirm their plan document allows it.
How much can I contribute to my 401(k) in 2026?
Total contribution potential in 2026 depends on age. Employees under 50 can defer up to $24,500. Those 50 to 59 or 64 and older can add a catch-up for $32,500 total. Employees 60 to 63 can use the SECURE 2.0 super catch-up for $35,750 total.
New Numbers, Same Advice: Update Your Plan Before Contributions Start
The 2026 increases to 401(k) and IRA limits are good news for anyone trying to save more, but they only help if your payroll and plan documents keep up. That means updating deferral caps, confirming whether your plan allows the SECURE 2.0 super catch-up, and giving employees clear numbers instead of guesses. None of this is complicated, but it is easy to let slip when you are running a business. guHRoo handles the payroll and plan administration work so retirement limit changes never become your problem to untangle.
Catch the rest of Jason’s Captain’s Corner series, including our breakdown of the 2026 IRS mileage reimbursement rules, and see what a compliant payroll setup could save your business with the Bound Payroll Employer Cost Calculator.
