As we step into 2026, it's crucial to stay informed about the latest changes in retirement and savings contribution limits. Understanding these updates not only helps in planning for the future but also ensures you're maximizing your financial benefits. This guide will walk you through the key updates for various savings plans, including workplace retirement plans, SIMPLE IRAs, Individual Retirement Accounts (IRAs), Health Savings Accounts (HSAs), and Indiana 529 plans.
NOTE: "Catch-up" contributions allow older employees to accelerate their savings as they near retirement:
Workplace retirement plans (401(k), 403(b), 401(a):
- Employee elective deferral limit: The maximum you can contribute to a 401(k), 403(b), or most 457 plans will increase to $24,500 for 2026.
- Catch-up contribution (age 50-60 or 64+): You can make an additional catch-up contribution of $8,000, for a total of $32,500.
- Super catch-up (ages 60–63): For employees aged 60 through 63, the catch-up contribution is higher, at $11,250. This makes the total possible contribution for this age group $35,750.
- Total contributions (employee + employer): The maximum combined employee and employer contribution limit for a defined contribution plan is $72,000, excluding catch up contributions.
- Mandatory Roth catch-up for those earning over $150k: Starting in 2026, employees who earned more than $150,000 in 2025 and are 50 or older must make any catch-up contributions as after-tax Roth contributions.
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SIMPLE IRA: The maximum employee contribution increases to $17,000. (** see “Enhanced Plan” contribution maximum below)
- Catch-up (ages 50-59 or 64+) you can make an additional catch-up contribution of $4,000, for a total of $21,000.
- Super Catch-up (ages 60 – 63) you can make an additional catch-up contribution of $5,250, for total contributions of $22,250 (this is not available on the enhanced plan below)
**Enhanced Plan (offered by employer with 25 or fewer employees, or by larger employers making higher contributions) The maximum employee contribution increases to $18,100:
- Catch-up (ages 50-59 or 64+) you can make an additional catch-up contribution of $3,850, for a total of $21,950
- Special Catch up (ages 60 – 63) you can make an additional catch-up contribution of $5,250, for a total of $23,350
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Individual Retirement Accounts (IRAs):
- Traditional and Roth IRA contribution limit: The total you can contribute across all of your traditional and Roth IRAs increases to $7,500.
- IRA catch-up contribution (age 50+): An additional $1,100 can be contributed by those 50+ for a total of $8,600.
- Please be mindful that Traditional IRAs and Roth IRAs have income restrictions:
- To make a full Roth IRA contribution your MAGI (Modified Adjusted Gross Income) must be below $242,000 (Married Filing Jointly) or $153,000 (Single taxpayers).
- For those who have earned income you may make a contribution to a traditional IRA but this contribution may not be tax deductible if or your spouse have a retirement plan through work and if your income is above a certain threshold. Please see these updated limits here or speak with one of our advisors to determine your eligibility.
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Health Savings Accounts (HSAs are tax-advantaged accounts that help cover medical expenses)
- Individual coverage: The contribution limit for those with self-only coverage under a high-deductible health plan (HDHP) is $4,400.
- Family coverage: The limit for those with family HDHP coverage is $8,750.
- HSA catch-up contribution (age 55+): Individuals 55+ can make an additional $1,000 catch-up contribution.
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Indiana 529 contributions & qualified distribution limits (529 plans are a tax-advantaged way to save for education expenses)
Tax credit And Contributions: For the 2026 tax year, the Indiana 529 plan is the same as last year. All contributions will receive a maximum tax credit of $1,500. The credit is calculated as 20% of your contribution (up to $7,500).
*Please be mindful that anyone can contribute to a 529 plan but the Indiana 529 contribution can be the most impactful for Indiana residents who may owe state income taxes. 529 plans do not have limitations on where beneficiaries can attend school. If you are not an Indiana resident please reach out to our office for advice on the best options to meet your needs.
- Higher Education: Tuition, fees, books, supplies, and equipment for eligible post-secondary institutions (computers, software, internet access & special needs equipment). Room and board can be included if the student is enrolled at least half-time.
- K-12 Tuition: The annual limit for qualified K-12 tuition (public, private, or parochial) increases to $20,000 per year.
- Apprenticeship Programs: Programs registered with the Department of Labor are considered qualified expenses.
- Credentialing and Licensing: Expenses for professional certificates, licenses, and continuing education programs are eligible, including exam fees.
- Student Loan Payments: Under federal law, up to $10,000 can be used for lifetime student loan payments. *This may conflict with state laws. Please reach out to one of our advisors regarding your specific circumstances.
Important Considerations:
- Timing of Withdrawal: Ensure that your withdrawals for qualified expenses are made in the same calendar year the expenses occur to avoid penalties
- Non-qualified expenses: Be aware that non-qualified expenses like transportation and health insurance are not qualified and can lead to income tax and a 10% penalty on the earnings portion.
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Staying informed about these contribution limits and updates can significantly impact your financial planning. By understanding and leveraging these changes, you can maximize your retirement and savings opportunities in 2026. For personalized advice and to ensure you're making the most of these updates, please consult with one of our advisors.
For further details, visit the IRS websitefor the employer sponsored retirement plans | visit the IRS websitefor personal IRA retirement plans or contact our office. We're here to help you navigate these changes and optimize your financial future.