With the start of 2026 comes new opportunities and changes. While routine can be good, some changes can be profitable if you know what to do.
The IRS released the new numbers for 2026 retirement contribution limits. These changes may look small on paper, but maxing out these tax-advantaged accounts over the years can make a big difference.
Below is what you need to know:
Individual Retirement Accounts (IRAs)
- The 2026 base contribution limit for Traditional and Roth IRAs increases by $500 to $7,500.
- Catch-up contributions for those age 50 and older increase by $100 to $1,100.
- This brings the total potential contribution for those 50 and older to $8,600.
- This is a good time to review automated contributions that may have been set years ago.
- A small adjustment now may quietly improve long-term outcomes.
- Check with your financial advisor to be sure these updates are reflected in your plan.
Roth IRAs: Navigating the Income Limits
- Roth IRAs offer tax-free growth and tax-free withdrawals in retirement.
- High earners face income limits that may prevent direct contributions.
- New 2026 Roth phase-out ranges are:
- Single or Head of Household: $153,000 to $168,000
- Married Filing Jointly: $242,000 to $252,000
- Married Filing Separately: $0 to $10,000
- Many households exceed these thresholds.
- This is where strategy becomes more important than rules alone.
- A conversation about options like a backdoor Roth can help preserve tax diversification over time.
SEP IRA Plans for Business Owners and the Self-Employed
- Contribution limits are tied to compensation rather than a flat dollar amount.
- For 2026, the maximum SEP IRA contribution increases to $70,000 or 25 percent of eligible compensation, whichever is lower.
- Contributions are generally tax-deductible for the business owner, which can meaningfully reduce current-year taxable income.
- SEP IRAs offer flexibility since contributions are discretionary and can change year to year based on cash flow.
- They can be especially useful in high-income years when other retirement accounts are already maxed out.
- Because SEP contributions interact with other retirement plans, coordination matters.
Workplace Plans: 401(k)s and 403(b)s
- Employer sponsored plans typically allow the largest tax advantaged contributions.
- The 2026 standard contribution limit increases by $1,000 to $24,500.
- For those age 50 and older, the standard catch up raises the total limit to $32,500.
- A new rule applies to individuals ages 60 through 63.
- This group can now make a catch-up contribution of $11,250.
- That raises the total possible contribution to $35,750.
- These years often represent a final opportunity to strengthen retirement savings before full retirement.
Updates for Business Owners Using SIMPLE Plans
- SIMPLE IRA contribution limits increase by $500 to $17,000.
- Under Secure Act 2.0, certain applicable plans allow contributions up to $18,100.
- Business owners should revisit retirement strategies regularly as rules continue to evolve.
- Your retirement plan deserves the same intentional planning as your business itself.
Many factors contribute to your individual long-term investing strategy. If you don’t know where to start, schedule a meeting today.