With a new year comes many new changes—setting up a fresh calendar, refining your financial goals, and adjusting to new IRS contribution and gifting limits.
Each year, the IRS updates the contribution limits and income phase-outs for retirement plans, health savings accounts, flexible spending accounts, and gift and estate tax rules. These adjustments may seem small, but they can meaningfully impact your long-term planning, especially if you maximize tax-advantaged savings or make substantial gifts.
Below, we break down the 2026 updates.
Retirement Plan Contribution Limits
Maximizing employer retirement plans is one of the most effective ways to save for the future—especially if your employer offers matching contributions. For high-income earners, contribution increases can also create additional tax-shielding opportunities.
|
Plan Type |
2025 |
2026 |
Change |
|
Maximum employee elective deferral or pretax contribution limit for 401(k), 403(b) and most 457 plans – younger than age 50 |
$23,500 |
$24,500 |
$1,000 |
|
Elective deferral – age 50+ catch-up (regular) |
$7,500 |
$8,000 |
$500 |
|
Elective deferral – age 60-63 “super” catch-up (Note: the super catch-up contribution was new in 2025. Read more about it here.) |
$11,250 |
$11,250 |
No change |
|
Traditional & Roth IRA contribution limit - younger than age 50 |
$7,000 |
$7,500 |
$500 |
|
IRA catch-up (age 50+) |
$1,000 |
$1,100 |
$100 |
|
Defined contribution plan annual addition limit (employer + employee) |
$70,000 |
$72,000 |
$2,000 |
Important Change for 2026: Certain Catch-Up Contributions Must Be Roth
Beginning January 1, 2026, a major SECURE Act 2.0 rule takes effect:
If your prior-year wages from the sponsoring employer exceed $145,000 (indexed), any age-50+ catch-up contributions must be made as Roth.
This applies to:
- 401(k)
- 403(b)
- Governmental 457(b) plans
What this means for high-earners:
- Catch-up contributions will no longer reduce taxable income if you exceed the wage threshold.
-
Your employer plan must offer a Roth option—otherwise you cannot make catch-up contributions.
-
Plan sponsors have until December 31, 2026 to adopt required amendments, but enforcement begins in 2026.
If you are a high-income participant, review your plan’s Roth availability well before year-end.
Income Phase-Out Ranges for IRAs
Before contributing to an IRA, ensure your income falls within the allowable range. These ranges determine:
- Whether a Traditional IRA contribution is deductible
- Whether you can contribute directly to a Roth IRA
If you’re above these ranges, advanced planning opportunities—such as the backdoor Roth IRA or mega-backdoor Roth strategy—may still be available depending on your employer plan.
|
Contribution Types |
2024 |
2025 |
Change |
|
Traditional IRA deductible contribution - Single (covered by workplace retirement plan) |
$79,000 - $89,000 |
$81,000 - $91,000 |
$2,000 |
|
Traditional IRA deductible contribution - Married Filing Joint (covered by workplace retirement plan) |
$126,000 - $146,000 |
$129,000 - $149,000 |
$3,000 |
|
Roth IRA contribution – Single |
$150,000 - $165,000 |
$153,000 - $168,000 |
$3,000 |
|
Roth IRA contribution - Married Filing Joint |
$236,000 - $246,000 |
$242,000 - $252,000 |
$6,000 |
Health and Dependent Care Savings & Spending Accounts
Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) continue to be powerful tax-advantaged tools, especially for high-income earners.
For 2026, one notable change is the increase in the dependent care FSA contribution limit.
|
Heath Savings Accounts (HSAs) |
2024 |
2025 |
Change |
|
HSA Contribution Limit (Employer + Employee) |
Self-only: $4,150 Family: $7,750 |
Self-only: $4,300 Family: $8,550 |
Self-only: $150 $800 |
|
HSA Catch-Up Contribution Limit (Age 55+) |
$1,000 |
$1,000 |
No change |
|
Heathcare Flexible Spending Accounts (FSAs) |
2024 |
2025 |
Change |
|
Maximum salary deferral |
$3,300 |
$3,400 |
$100 |
|
Maximum rollover amount |
$660 |
$680 |
$20 |
|
Dependent Care Flexible Spending Accounts |
2024 |
2025 |
Change |
|
Maximum salary deferral (single and married filing jointly) |
$5,000 |
$7,500 |
$2,500 |
|
Maximum salary deferral (married filing separately) |
$2,500 |
$3,750 |
$1,250 |
Estate and Gift Tax Limits for 2026
One of the biggest changes heading into 2026 is the result of the One Big Beautiful Bill Act (OBBBA), which prevents the 2026 “sunset” of the estate exemption that many planners previously anticipated.
Instead, for 2026, the lifetime exemption increases, and will continue to be indexed going forward.
|
|
2024 |
2025 |
Change |
|
Annual gift tax exclusion |
$19,000 |
$19,000 |
No change |
|
Gift tax and estate tax exclusion amount |
$13,990,000 |
$15,000,000 |
$1.01mm |
This higher exemption—now permanent under OBBBA—significantly expands opportunities for:
- Lifetime gifting
- Spousal Lifetime Access Trusts (SLATs)
- Charitable planning
- Business succession and wealth transfer strategies
High-net-worth families should revisit their estate plans in 2026 to ensure they are optimizing this expanded protection.
What Should You Do Next?
Whether you’re optimizing contributions, planning for retirement, evaluating charitable strategies, or navigating multi-generational wealth transfer, updated IRS limits are just the starting point. The true value comes from aligning these rules with your long-term goals.
Not a Plancorp client yet?
Start with our quick 2-minute financial analysis to identify your biggest opportunities.
Evaluating your current advisor?
Download our free guide to understand what you should expect from a true fiduciary partner.
Already a Plancorp client?
Connect with your wealth manager to:
- Review updated contribution limits
- Confirm Roth vs. pre-tax strategies (especially in light of the new catch-up rules)
- Adjust financial goals
- Revisit estate plans under the new 2026 exemption
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