Most of us want to eventually retire. More to the point, we want to spend our post-work days on our terms. That means we need to save before the last day on the job. Tax law changes and new IRS numbers on how much we can stash in tax-favored retirement plans in 2026 can help us reach our retirement goals.
Inflation’s tiniest silver lining is that it means a bump in the amount we can contribute to Internal Revenue Service authorized retirement plans.
For millions of us, that’s money in individual retirement arrangements, both traditional and Roth IRA versions.
In addition, half of the United States’ private-sector workers contribute to 401(k) workplace retirement plans. Similar employer plans, known by the Internal Revenue Code (IRC) section 403(b), are available to public school and nonprofit employees, with IRC-dubbed 457(b) plans available to state and local government workers.
In 2026, participants in all these tax-favored retirement plans can save more, according to today’s belated (thanks, not thanks government shutdown) IRS inflation adjustment announcement.
Here, in Part 8 of the ol’ blog’s 10-part inflation series, are the retirement savings increases for the coming year.
IRA inflation changes: The IRS retirement changes technically rely on the cost-of-living adjustment (COLA), which is based on average annual inflation rates. And while inflation’s costly effects are distressingly evident on every grocery run, the increases are not that dramatic when it comes to the retirement plan contribution amounts.
Still, any added amount you can put into a retirement plan, and the earlier you do so, the better.
The 2026 limit on how much you can contribute to an individual retirement arrangement (IRA) — and yes, the official name is arrangement, not account, but the popular IRA acronym works either way — will go up to $7,500. The increase applies to both traditional and Roth IRAs. That’s a slight bump from this year’s $7,000.
Older traditional or Roth IRA owners also can contribute added amounts, known as catch-up contributions. Thanks to the Setting Every Community Up for Retirement Enhancement (SECURE) Act 2.0 enacted at the end of 2022, these added amounts allowed individuals who are age 50 or older can be bumped up by inflation/COLA adjustments.
For 2026, these catch-up IRA contributions will be $1,100. That’s $100 more that the current one grand.
More earnings for IRA maneuverability: Roth IRAs are the preferred savings vehicle for younger workers, who contribute already-taxed money and then don’t have to worry about paying taxing on the Roth IRA funds they eventually withdraw.
Some savers, however, find a traditional IRA worthwhile. It’s particularly appealing to taxpayers who, depending on income, marital status, and retirement options at work, can claim a deduction for at least some of their traditional IRA contributions.
Those contributions and their deductibility are determined by your income. It determines not only whether you can make tax-deductible contributions to a traditional IRA, but also whether you can contribute at all to a Roth IRA, and/or claim the Saver’s Credit.
If you (or your spouse, if you’re married and file jointly) don’t have a retirement plan at work, you can deduct your full traditional IRA contribution. But if either spouse is covered by a workplace retirement plan, the deductible amount of a traditional IRA contribution is phased out or totally eliminated depending on your filing status and income.
The table below shows how much more you can make in 2026 before you hit the level where your traditional IRA contributions are reduced or are no longer deductible. The table also shows 2025 amounts for two reasons.
First, it gives you an idea of the change. Second, you still have time to contribute to, and max out, your 2025 IRA contribution.
| Traditional IRA | 2025 phase-out range based on MAGI* | 2026 phase-out range based on MAGI* |
| Singles and Heads of Households who are covered at work by a retirement plan | $79,000 to $89,000 | $81,000 to $91,000 |
| Married couples filing jointly and the spouse making the contribution is covered by a workplace retirement plan | $126,000 to $146,000 | $129,000 to $149,000 |
| Married couples filing jointly and the contributing spouse has no workplace plan, but his/her spouse is offered a workplace retirement plan | $236,000 and $246,000 | $242,000 and $252,000 |
| Married individual filing a separate return and is covered by a workplace retirement plan** | $0 to $10,000 | $0 to $10,000 |
| *MAGI is modified adjusted gross income. It is your adjusted gross income (AGI) with certain deductions and non-taxable income sources added back. Shameless plug: More on MAGI in the ol’ blog’s glossary. **There is no annual inflation adjustment in married-filing-separate situations. | ||
More room for Roth contributions: Roth IRA contributions are not tax deductible when you make them, but withdrawals of earnings when you retire are not taxed.
However, there are some income limits on who can contribute to these tax-free retirement savings vehicles. The good news for next year’s contributions is that this phase out range increases.
For 2026, the amount you can put into a Roth is reduced if your earnings are within the income range for your filing status in the following table. As in the prior table, the 2025 amounts are included for comparison and tax planning for the rest of this year.
| Roth IRA | 2025 phase-out range based on MAGI | 2026 phase-out range based on MAGI |
| Singles and Heads of Households | $150,000 to $165,000 | $153,000 to $168,000 |
| Married couples filing jointly | $236,000 to $246,000 | $242,000 to $252,000 |
Again, note the top dollar amounts. Once your income exceeds the maximum amount for your filing status, you cannot contribute to a Roth IRA.
You can, however, contribute to a traditional IRA and then convert that account to a Roth IRA.
Just like a traditional IRA, the phase-out range for a married individual making Roth contributions while filing a separate tax return is not subject to an annual COLA and stays at $0 to $10,000.
Workplace plan changes, too: In addition to IRAs, some folks are able to stash retirement money in workplace defined contribution accounts, typically known in the private sector as 401(k) plans.
The tax code monikers for company-provided retirement plans are slightly different for folks employed by other groups. They’re known as 403(b) for some nonprofits and teachers, 457 plans for certain government employees, and Uncle Sam’s Thrift Savings Plan (TSP) for civil service employees and retirees, as well as for members of the uniformed services. The same COLA changes to 401(k)s tend to apply to these plans, too.
The contribution limit for employees who participate in 401(k), 403(b), most 457 plans and the TSP goes up in in 2026 to $24,500. That’s a $500 bump up from the 2025 contribution cap of $23,500.
The workplace plan catch-up contribution limit in 2026 for employees aged 50 or older and who participate in these plans goes to $8,000. That’s a $500 bump from the 2025 catch-up limit of $7,500.
The math means that many participants age 50 or older in these workplace plans can contribute a maximum in 2026 of $32,500.
Some older savers, however, will be able to put away even more in their workplace plan. A SECURE 2.0 change gives employees aged 60, 61, 62, and 63 a larger catch-up contribution amount. They can add $11,250 next year (the same as in 2025) instead of $8,000.
This SECURE 2.0 change gives these older savers a maximum workplace contribution limit in 2026 of $35,750.
For IRAs, those 50 and older will be able to contribute an extra $1,100. The IRA catch-up contribution—long $1,000—is now being adjusted for inflation under a provision of a 2022 law.
Special retirement situations: There’s also a new consideration for higher-income retirement savers looking to take advantage of their workplace plan’s catch-up contributions.
If you earn more than $150,000 you generally must funnel your 401(k) catch-up dollars into an after-tax Roth 401(k) account. The Treasury Department and IRS issued the final catch-up regulations on Sept. 15.
The good news is that the Roth catch-up requirement generally will apply to contributions in taxable years beginning after Dec. 31, 2026. So, if the change affects you, you have some time to plan.
And if you’re lucky enough to work for a place that has an old-school defined benefit plan — this is where your boss takes total care of your retirement fund — there’s a hike here, too. The limitation on the annual benefit of this retirement plan goes from $280,000 in 2025 to $290,000 next year.
Small business plan bump: When you’re the boss of your own company, in addition to concentrating on turning a profit, you need to think about the day when you, and your employees, decide to retire.
One option is a SIMPLE, or savings incentive match plan for employees (final, I swear, glossary plug). The limit in 2026 on these retirement plans goes up nominally to $17,000 from the 2025 limit of $16,500. A change made in SECURE 2.0, however, allows some individuals to contribute a higher amount to certain applicable SIMPLE retirement accounts. For 2026, this higher amount is increased to $18,100. That’s up from $17,600 in 2025.
As for catch-up contributions, the SIMPLE limit for individuals aged 50 or older in 2026 increased to $4,000. That a bump from 2025’ level of $3,500. But again, SECURE 2.0 change allows for a different catch-up limit for employees aged 50 and older who participate in certain applicable SIMPLE plans. In these cases, the 2026 catch-up limit remains at the 2025 catch-up limit of $3,850.
SECURE 2.0 also helps with catch-up contributions for some sexagenarians with SIMPLE plans. Those aged 60, 61, 62, and 63 can in 2026 make catch-up contributions up to $5,250. That’s the same as this year’s SIMPLE catch-up limit.
Added credit for saving: A tax code bonus for taking charge of your retirement, the Saver’s Credit, also potentially is affected each year by inflation. This tax benefit, officially titled the Retirement Savings Contributions Credit, rewards low- and moderate-income individuals for adding to their nest eggs.
This credit, which is a dollar-for-dollar reduction in any tax you owe, is worth a maximum $1,000.
You can claim the Saver’s Credit based on the money you put into IRAs and workplace plans, either where you are an employee or are self-employed. But it is not available if you make more than the earnings limit for your filing status.
In 2026, the Saver’s Credit maximum earnings caps go to:
- $40,250 for singles and married filing separately taxpayers, up from $39,500 in 2025;
- $60,375 for heads of household, up from $59,250 this year; and
- $80,500 for married couples filing jointly, up from the 2025 limit of $79,000.
Here’s the full table and percentages, based on your adjusted gross income (AGI) for the 2026 Retirement Saver’s Credit:
| 2026 Saver’s Credit Amount | Single, married filing separately or qualifying widow/er | Married filing jointly | Head of household |
| 50% of your contribution | AGI not more than $24,250 | AGI not more than $48,500 | AGI not more than $36,375 |
| 20% of your contribution | $24,251 to $26,250 | $48,501 to $52,000 | $36,376 to $39,375 |
| 10% of your contribution | $26,251 to $40,250 | $52,001 to $80,500 | $39,376 to $60,375 |
| No credit | $40,251 or more | $80,501 or more | $60,376 or more |
And if you’re looking to claim the Saver’s Credit on your 2025 tax return, you can do so if your income this year falls within the following income ranges:
| 2025 Saver’s Credit Amount | Single, married filing separately or qualifying widow/er | Married filing jointly | Head of household |
| 50% of your contribution | AGI not more than $23,750 | AGI not more than $47,500 | AGI not more than $35,625 |
| 20% of your contribution | $23,751 to $25,500 | $47,501 to $51,000 | $35,626 to $38,250 |
| 10% of your contribution | $25,501 to $39,500 | $51,001 to $79,000 | $38,251 to $59,250 |
| No credit | $39,501 or more | $79,001 or more | $59,251 or more |
Donating retirement money: Some people have planned so well for retirement that they can take their time spending the money. Not so fast, says Uncle Sam.
If your retirement funds are in tax-deferred accounts, the Internal Revenue Code requires you to eventually start taking distributions and paying tax on the withdrawals.
These amounts, known as required minimum distributions or RMDs. The age at which you must begin RMDs varies, based on changes in the Setting Every Community Up for Retirement Enhancement, or SECURE, Acts 1.0 in 2019 or 2.0 enacted at the end of 2022.
Now, the RMD age generally is 73. The exact amount you must withdraw is calculated each year after you hit your RMD starting age by using one of the IRS’ life expectancy tables. They are found in Appendix B of IRS Publication 590-B.
These tables are created for various lifestyle situations, but most people use the Uniform Lifetime Table, which the IRS updated in 2020. You also can use AARP’s online RMD calculator to determine the amount you must withdraw.
Withdrawals from tax-deferred retirement accounts are taxed at ordinary tax rates, which now top out at 37 percent. Depending on how much you’ve saved, an RMD could be in the tens of thousands. Such a hefty chunk of change could bump you into a higher tax bracket, as well as increase your Medicare costs.
There is some relief here if your RMD-mandated account is a traditional IRA and you don’t need the required withdrawal to cover living expenses. You can use the money to make a qualified charitable distribution (QCD).
Here you roll your RMD directly from your IRA to an IRS-qualified charity. The amount meets your RMD for the year, but that amount is excluded from your taxable income.
Even better, you can start making QCDs before you hit your RMD age. Once you turn 70½ years old, you can start lowering your potential RMD amount by making these special charitable gifts.
The base maximum QCD amount you can exclude from your gross income was set by law at $100,000. But it’s also subject to a potential annual inflation increase. The QCD amount goes from this year’s $108,000 to $111,000 in 2026.
Tax inflation preview: Well, I’m certainly ready to retire after wading through all this. But I’m hanging on a tad longer, of course to finish the ol’ blog’s 2026 inflation series.
Here’s a table of contents preview of what’s ahead in this year’s version of tax-related inflation changes. It also is a good indicator of why I do it as a series.
- 2026 tax rates and income brackets
- Standard deduction amounts and itemized deduction considerations
- Credits and deductions, including adoption costs and assistance, Lifetime Learning Credit, Earned Income Tax Credit, educators’ expenses, interest on education loans and transportation fringe benefits
- Medical-related tax provisions, including contributions to a flexible spending account (FSA), health savings account (HSA), medical savings account (MSA), and eligible and eligible long-term care premiums
- Capital gains tax income brackets, estate and gift tax limits, kiddie tax, kiddie tax, and nanny tax
- Alternative Minimum Tax exemption amounts and One Big Beautiful Bill Act changes for 2026, along with the Social Security wage base increase amount and other pay-related taxes
- International worker tax issues, including foreign income and housing exclusions
- Retirement (e.g., IRA etc.) and pension plan contribution limits
- Penalties, for both individuals and tax pros, for things such as failure to file a timely 1040 or certain information returns
- Standard mileage deduction rates (This is the final component, since the IRS issues these adjustments and later in the year.)
Since I just relaunched the ol’ blog, I’m still catching up on adding posts (Parts 3 through 7) here that appeared, after my original site’s host closed down on Sept. 30, on my Don’t Mess With Taxes Substack.
Again, I know all y’all tax geeks want as much tax information as soon as possible. I get it. So, I really appreciate your patience when comes to my extended presentation of the 2026 tax inflation info.
