For 2026, the IRS will be raising IRS contribution limits on 401(k)’s, 403(b)’s and 457(b) plans. Remember, these plans are offered by your workplace. There are other plans you can have that are separate if you don’t have one of these plans available to you.

In Yesterday’s post, I mentioned that the limit for 2025 was $23,500. Next year, it will be raised to $24,500. This applies to anyone. However, if you’re 50 or over, the catch-up contribution will rise from $7,500 to $8,000. And, there is a special pre-retirement catch-up contribution for people aged 60–63 of $22,250. This is extremely advantageous for older workers who need to augment their retirement savings.  There are some rules for this special catch-up so make sure you check those out first. One of the rules is that you can’t have maximized your contributions in each of your previous eligible years.

For Traditional and Roth IRAs, the contribution limit will be raised to $7,500 for those under 50. If you’re 50 and older, the limit will go to $1,100 more or $8,600 next year. I highly recommend using a Roth IRA and max that out if you can. Roth’s are post-tax dollars and as long as you have them for at least 5 or more years, you’ll never pay taxes on them.

Unfortunately, most people don’t even come close to maxing out their retirement savings. People say they save little or nothing for retirement and that’s really sad. They cite the exorbitant cost of living, their debt obligations, and supporting a family. I read a report that says American’s save an average of $7,000/year. I could not find any supporting details for that but it wouldn’t surprise me. Most young people I see value “instant gratification” over planning for their futures.

Moral of the story:

While you may not be able to maximize your IRS contribution limits on your 401(k)’s, 403(b)’s and 457(b) plans, you should be aware of them. You should strive to save at least 10%–15% of your income each month at a minimum. Use a Roth IRA as well. And, as I said yesterday, no matter where you’re at, you should start now. For more specifics, go to https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500.