Every year, the IRS updates the amount that workers are eligible to contribute to their Individual Retirement Accounts (IRAs) and to their workplace retirement plans. Because these accounts are tax-advantaged, the government puts a limit on how much employees can stash away for the future. These contribution limits are often adjusted annually for inflation and cost of living.
Employer-sponsored retirement plans in particular are vital vehicles of our wealth-building journeys. The 401(k) plan is by far the most prevalent for private sector employees, while the 403(b) and 457(b) plans are common in public, educational, and non-profit sectors. The Thrift Savings Plan (TSP) is designed for federal employees and members of the uniformed services in the United States.
| Account Type | 2026 | 2025 | Increase Amount |
|---|---|---|---|
| 401(k), 403(b), 457(b), TSP, etc. | $24,500 | $23,500 | $1,000 |
| IRA (Traditional or Roth) | $7,500 | $7,000 | $500 |
| SEP IRA | $72,000 or 25% of total compensation | $70,000 or 25% of total compensation | $2,000 |
| Simple IRA | $17,000 | $16,500 | $500 |
| Account Type | 2026 | 2025 | Increase Amount |
|---|---|---|---|
| 401(k), 403(b), 457(b), TSP, etc.* | $32,500 | $31,000 | $1,500 |
| IRA (Traditional or Roth) | $8,600 | $8,000 | $600 |
| SEP IRA | $72,000 or 25% of total compensation | $70,000 or 25% of total compensation | $2,000 |
| Simple IRA | $20,500 | $20,000 | $500 |
*Those aged 60-63 are eligible to contribute $35,750 into their workplace retirement plan.
One important caveat: Starting in 2026, those who earn more than $150,000 must direct their 401(k) catch-up dollars into an after-tax Roth 401(k) account. If your employer doesn’t offer one, you won’t be eligible for your catch-up contributions.
It can often be quite a process to sort through all of these numbers. These are some of the most common questions we hear while planning for the year ahead:
At One Day In July, our advisors help clients investigate these questions and design a strategic roadmap with the aim of saving for the future and reaching their financial goals. Contact us to set up a consultation and learn more.
Sources: https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500
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