Workers 50 and older can save even more<\/a>, according to the new IRS guidance, which raises the catch-up contribution limit to $8,000 for 2026 \u2014 up from $7,500 in 2025.<\/p>\n That means older savers can deposit up to $32,500 in their 401(k)s next year.<\/p>\n Employees aged 60 to 63 get an even bigger break.<\/p>\n They can contribute an extra $11,250 on top of the $24,500 base limit, for a total of $35,750.<\/p>\n That figure, which is unchanged from this year, stems from changes enacted in the Secure 2.0 Act of 2022.<\/p>\n Despite the higher limits, most workers don\u2019t come close to maxing out. <\/p>\n Only 14% of participants contributed the maximum to their 401(k)s in 2024, according to Vanguard\u2019s 2025 How America Saves report<\/a>, which analyzed more than 1,400 plans and nearly 5 million participants.<\/p>\n The average combined savings rate, including employer contributions, was 12% in 2024, according to Vanguard. <\/p>\n A separate Fidelity Investments analysis of more than 25,000 corporate plans<\/a> found the average combined rate was 14.2% during the second quarter of 2025.<\/p>\n The IRS also allowed workers to raise IRA contribution limits next year.<\/a><\/p>\n Employees will soon be able to contribute $7,500<\/a> to traditional or Roth IRAs, up from $7,000 in 2025.<\/p>\n The catch-up contribution for savers 50 and older rises to $1,100, from $1,000.<\/p>\n Income thresholds for Roth IRA contributions also increased. <\/p>\n Singles and heads of household can make full Roth contributions if their income is below $153,000, up from $150,000 in 2025.<\/p>\n The phase-out range extends to $168,000.<\/p>\n For married couples filing jointly, the Roth IRA phase-out range is $242,000 to $252,000, up from $236,000 to $246,000 in 2025.<\/p>\n The IRS also adjusted income ranges for deducting traditional IRA contributions.<\/p>\n For single taxpayers covered by a workplace retirement plan, the phase-out range is $81,000 to $91,000, up from $79,000 to $89,000 in 2025.<\/p>\n For married couples filing jointly where the contributing spouse has a workplace plan, the range is $129,000 to $149,000, up from $126,000 to $146,000.<\/p>\n The Saver\u2019s Credit, which helps low- and moderate-income workers save for retirement, also saw higher income limits. Married couples filing jointly can now earn up to $80,500 and still qualify, up from $79,000 in 2025.<\/p>\n Workers with SIMPLE retirement accounts can contribute $17,000 in 2026, up from $16,500. The catch-up limit for those 50 and older rises to $4,000, from $3,500.<\/p>\n The announcement came hours after President Donald Trump signed a funding bill to end the longest federal government<\/a> shutdown in US history.<\/p>\n![\"The](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/11\/1040-tax-return-u-s-103268601.jpg\")
The agency announced the increase Thursday, up from $23,500 in 2025. The change applies to 401(k)s, 403(b)s, most 457 plans and the federal Thrift Savings Plan. Christopher Sadowski<\/p>\n![\"Only](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/11\/114041893.jpg\")
Only 14% of participants contributed the maximum to their 401(k)s in 2024, according to Vanguard\u2019s 2025 How America Saves report. maxexphoto \u2013 stock.adobe.com<\/p>\n