As we enter the new year, the IRS has released updated retirement contribution limits for 2026. This serves as a natural checkpoint to review your current savings strategy and ensure your contributions are aligned with the new thresholds. Even small adjustments made early in the year can have a meaningful impact on your long-term outcomes through the power of tax deferral and compounding.
In addition to inflation adjustments, 2026 marks the first full year of broader tax changes following the passage of the One Big Beautiful Bill Act (OBBBA). For a high-level summary of how this new legislation affects tax rates and deductions, we recommend reviewing the guide published by our Senior Advisor and Partner, Meghan Muñoz, CPA, CFP®, CDFA®:
New Tax Legislation Explained: A Financial Advisor’s Guide to the OBBBA
Workplace Retirement Plans (401(k), 403(b), 457, and TSP)
Employer-sponsored plans remain one of the most powerful tools for building wealth. For 2026, many of these limits have increased to allow for greater tax-advantaged savings.
- Employee Contribution Limit: $24,500 (up from $23,500 in 2025).
- Standard Catch-up (Age 50+): $8,000.
- “Super Catch-up” (Ages 60–63): $11,250.
Note for High Earners: Under the SECURE 2.0 Act, beginning in 2026, participants with prior-year wages exceeding $145,000 must make their catch-up contributions on a Roth (after-tax) basis.
Individual Retirement Accounts (IRAs)
Whether you utilize a Traditional or Roth IRA, the annual limits have seen a modest increase to keep pace with inflation.
- Annual Contribution Limit: $7,500.
- Catch-up Contribution (Age 50+): $1,100.
Income Phaseouts to Be Aware Of
Many retirement contributions and deductions are subject to income-based phaseouts, which can limit eligibility depending on filing status and participation in workplace plans.
| Filing Status | Traditional IRA Deduction Phaseout* | Roth IRA Contribution Phaseout |
| Single | $81,000 – $91,000 | $153,000 – $168,000 |
| Married (Joint) | $129,000 – $149,000 | $242,000 – $252,000 |
| Married (Separate) | $0 – $10,000 | $0 – $10,000 |
| *Assumes coverage by a workplace retirement plan. | ||
SIMPLE IRA Plans
- Contribution limit: $17,000
- Catch-up contribution (age 50+): $4,000
- Super catch-up (ages 60–63): $5,250
Note: Employers with 25 or fewer employees may be eligible for higher contribution limits under specific exceptions.
Social Security & The 2026 COLA
To help maintain purchasing power, the Social Security Administration has announced a 2.8% Cost-of-Living Adjustment (COLA) for 2026. Recipients should see this increase reflected in their January benefit payments. Additionally, the maximum earnings subject to Social Security tax has increased to $184,500.
The OBBBA and Your Standard Deduction
The OBBBA has made several permanent changes to the tax landscape. Notably, the Standard Deduction has increased for 2026:
- Married Filing Jointly: $32,200
- Single Filers: $16,100
- Heads of Household: $24,150
- New Senior Deduction: Individuals age 65+ may be eligible for an additional $6,000 deduction, subject to income phaseouts.
Turning New Limits into Opportunity
These updates are more than just numbers; they are opportunities to refine your financial plan. By maximizing your contributions and aligning your strategy with the current tax laws, you can direct more of your hard-earned dollars toward your life’s true purpose.
We encourage you to coordinate with your employer and your Alaska Wealth Advisors team early this year to implement these changes. If you have questions about how these new limits apply to your specific situation, we are here to help.
New to financial planning? We invite you to schedule a free introductory consultation to see how we can help you move forward with absolute confidence.
Derek Stone
Associate Financial Advisor
Alaska Wealth Advisors is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Alaska Wealth Advisors’ investment advisory services can be found in its Form ADV Part 2 and/or Form CRS, which is available upon request.
This material should not be construed as tax advice. You should always consult with your tax professional with regard to specific tax questions and obligations.
https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500
