Higher Retirement Plan Limits for 2026 – What You Need to Know
Each year, the IRS updates a wide range of retirement plan limits that affect employer-sponsored retirement plans and IRAs, including contribution caps, compensation thresholds, catch-up limits, and other relevant limits. These cost-of-living increases ensure the rules keep pace with inflation and help plan sponsors and participants stay on track. On November 13, 2025, the IRS released Notice 2025‑67, announcing the adjusted limits that go into effect January 1, 2026.
For plan sponsors and administrators working with Navia, it’s essential to understand how the changes apply, to update your plan documents and systems, and to communicate proactively with participants about the implications for their retirement strategy.
Table of Contents
- Key Limit Increases for 2026
- Catch-Up Contributions (Age 50 and Older)
- Why These Changes Matter for Navia Plan Sponsors & Participants
Key Limit Increases for 2026
Here are some of the most relevant changes that will impact defined-benefit plans, defined-contribution plans, IRAs, and other retirement vehicles:
| Plan / Account | 2025 Limit | 2026 Limit | Increase |
|---|---|---|---|
| 401(k), 403(b), 457(b) plans (elective deferral) | $23,500 | $24,500 | +$1,000 |
| IRA (Traditional and Roth) | $7,000 | $7,500 | +$500 |
| SIMPLE IRA (elective deferral) | $16,500 | $17,000 | +$500 |
Catch-Up Contributions (Age 50 and Older)
Individuals aged 50 and older can make additional “catch-up” contributions:
| Plan / Account | 2025 Catch-up | 2026 Catch-up | Increase |
|---|---|---|---|
| 401(k), 403(b), 457(b) plans | $7,500 | $8,000 | +$500 |
| IRA | $1,000 | $1,100 | +$100 |
| SIMPLE IRA | $3,500 | $4,000 | +$500 |
The catch-up contribution limit that generally applies for employees aged 50 and over who participate in most 401(k), 403(b), governmental 457 plans is increased to $8,000 for 2026. Therefore, participants in most 401(k), 403(b), and 457 plans who are 50 and older generally can contribute up to $32,500 each year, starting in 2026. Under a change made in the SECURE 2.0 Act, a higher catch-up contribution limit applies for employees aged 60, 61, 62, and 63 who participate in these plans. For 2026, this higher catch-up contribution limit remains at $11,250 instead of the $8,000 noted above.
Why These Changes Matter for Navia Plan Sponsors & Participants
1. Plan Documentation & Compliance
With the new limits effective January 1, 2026, it’s crucial that your plan documents, participant notices and administrative systems are updated accordingly. Failure to reflect the new limits could result in plan design non-compliance or missed opportunities for participants.
2. Participant Communication
Participants should be made aware of the higher limits, e.g., the increase in elective deferral maximum, catch-up limit, super catch-ups, etc. These enhancements can be used as part of the year-end communications to encourage greater retirement savings.
3. Strategy for Highly Compensated, Key Employees
Although many limits rose, not all did. For example, the Highly Compensated Employee (HCE) threshold under Sec 414(q)(1)(B) remains at $160,000. So sponsors should revisit nondiscrimination testing strategies, especially if compensation or contribution patterns shift.
4. Impact on Smaller / Owner-heavy Plans
The defined contribution and defined benefit increases could give owner-heavy plans additional room for contributions or benefits. For employers seeking to maximize tax-deductible retirement savings, these adjustments enhance strategic flexibility.
5. Review of Participant Defaults & Auto-enrollment Levels
Given the higher deferral cap ($24,500 for 2026), sponsors using auto-enrollment/default deferral escalation programs may want to revisit plan defaults or participant education to take advantage of the larger savings window.
Need help navigating these changes?
We encourage plan sponsors and administrators to begin updating documentation and systems now, communicate proactively with participants, and consider how the increased limits might better align with overall retirement-savings goals for your workforce.
If your organization needs assistance reviewing plan document amendments, updating enrollment communications, or recalibrating plan strategy for 2026, Navia’s retirement teams are ready to help.