Nov. 13 (UPI) — People can place more into their 401(k) and IRA retirement accounts in 2026 after the Internal Revenue Service announced limit increases on Thursday.
The new limits are $24,500 for 401(k) accounts, which is a $1,000 increase, and $7,500 for IRA accounts, which is a $500 change.
The change for 401(k) accounts also applies to 403(b) and most 457 retirement plans, plus the Thrift Savings Plans.
For those age 50 and above, the IRS also has changed the catch-up contribution limit for 401(k) plans to $8,000 next year, which is an increase of $500.
Those between ages 60 and 63 also can save another $11,250, which is the same amount available in 2025.
The catch-up contribution amounts are on top of the $24,500 limits for 2026, so those age 50 and over can contribute a combined total of $32,500 to their 401(k), 403(b), 457 or Thrift Savings Plan in 2026.
The changes will affect a significant number of workers in the United States and its territories.
Vanguard’s 2025 How America Saves Report shows 14% of 401(k) account holders contributed the maximum amount allowed in 2024.
That figure is based on data from almost 5 million owners of more than 1,400 qualifying plans, and their average combined savings rate was about 12%, which is a record high.
The qualifying earnings amounts for making deductible contributions to qualifying IRA accounts also is changing.
Phase-out ranges for 2026 are between $81,000 and $91,000 for single taxpayers, between $129,000 and $149,000 for married couples filing jointly, and between $242,000 and $252,000 for married IRA contributors who are not covered by a workplace retirement plan.
Those are increases of $2,000, $3,000 and $6,000, respectively.