The limits

Individual Retirement Account (Roth and Traditional)

Contribution Limits202620252024
IRA Contribution Limit$7,500$7,000$7,000
IRA Catch-up Contribution$1,100$1,000$1,000

401(k), 457 and 403(b)

Contribution Limits202620252024
401(k), 457 and 403(b) maximum annual elective deferral limit$24,500$23,500$23,000
401(k), 457 and 401(b) catch up contribution limit for those 50 and over$8,000$7,500$7,500

SIMPLE- Savings Incentive Match Plan for Employees

Contribution Limits202620252024
SIMPLE employee deferrals$17,000$16,500$16,000
SIMPLE catch up deferrals$4,000$3,500$3,500

Simplified Employee Pension (SEP IRA)

Contribution Limits202620252024
SEP annual compensation limit$360,000$350,000$345,000
SEP maximum contribution$72,000$70,000$69,000

Phase-out ranges for 2025

Traditional IRA MAGI Limits202620252024
Married filing jointly; a spouse who participates in an employer-sponsored plan$129,000- $149,000$126,000- $146,000$123,000- $143,000
Married filing jointly; a spouse who does not participate in an employer-sponsored plan$242,000- $252,000$236,000- $246,000$230,000- $240,000
Single or Head of Household$81,000- $91,000$79,000- $89,000$77,000- $87,000

For Roth IRAs, if your MAGI falls within the applicable range, you can make a partial contribution, but if it exceeds the top of the range, you are not allowed to make a contribution.

Roth IRA MAGI Limits202620252024
Married filing jointly$242,000- $252,000$236,000- $246,000$230,000- $240,000
Single or Head of Household$153,000- $168,000$150,000- $165,000$146,000- $161,000

What is the social security wage base for 2025?

 202620252024
Social Security Wage Base$184,500$176,100$168,600

What Is the Impact of These 2026 Changes?

These updated limits mainly give savers the chance to put more money into tax-advantaged retirement accounts. Here’s what that means:

  1. You can save more each year. Higher limits for 401(k)s, IRAs, SIMPLE plans, and SEPs let you set aside more for retirement with tax benefits.
  2. More people may qualify for IRA or Roth contributions. Expanded income ranges mean some individuals can now contribute who previously could not.
  3. Catch-up savings remain strong. If you’re 50 or older, you still have the ability to contribute extra on top of the regular limits.
  4. Good time to review your contributions. Make sure you’re taking advantage of employer matches and staying within IRS limits to avoid penalties.

Bear in mind that it’s crucial to stay within the IRS limits; exceeding them can lead to penalties, including a 10% fine and taxes on excess contributions. Individuals with multiple 401(k) plans, perhaps due to job changes, should be especially cautious to avoid inadvertently surpassing the annual limits.