What’s going to happen in 2026? If I could wave my hands over a crystal ball or rub a magic lamp, I’d tell you. Unfortunately, that stuff only works in the movies. But even though I’m not a sage or sooth-sayer with mystical powers, I do have guaranteed information you can take to the bank. And what is this beneficial information that is so important to have at the beginning of the year? The amount you can contribute to your retirement plans this year has gone up.

 

401(k) Plans

The amount individuals can contribute to their 401(k) plans in 2026 is $24,500, up $1,000 from last year. The new limit of $24,500 also applies to non-profit and government employer plans such as 403(b)s, 457 plans and the federal government’s Thrift Savings Plan (TSP).

 

The catch-up contribution limits for employees aged 50 and over who participate in those plans will increase to $8,000 for 2026 (up from $7,500 in 2025). That means participants 50 and up can make a maximum contribution 2026 of $32,500.

 

For employees age 60, 61, 62 and 63 there is a special catch-up provision. Those individuals can make a maximum catch-up contribution of $11,250, for a maximum contribution of $35,750.

 

 

IRAs

Allowed contributions are also going up for IRAs. Next year you’ll be able to put in up to $7,500, compared to $7,000 in 2025. The limit applies to the total amount contributed to your traditional and Roth IRAs.

 

Like employer retirement plans, catch-up contributions are allowed for individuals aged 50 and older. In 2026, the inflation-adjusted catch-up increases to $1,100, up $100 from 2025.

 

Phase-out limits can apply to IRA contributions. If you or your spouse were covered by an employer retirement plan, the deductibility of your IRA contribution may be decreased or eliminated because of your income.

  • For single taxpayers covered by a workplace retirement plan, your deduction will be phased out if income is between $81,000 and $91,000. In 2025 the range was $79,000-$89,000.
  • For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is between $129,000-$149,000, up from $126,000-$146,000 in 2025.
  • For an individual contributing to an IRA who is not covered by a workplace retirement plan and is married to someone who is covered, the phase-out range is between $242,000-$252,000.
  • For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains between $0-$10,000.

 

If neither you nor your spouse is covered by a retirement plan at work, phase-outs do not apply.

 

Roth IRAs

The contribution limit for a Roth IRA in 2026 is the same as a traditional IRA–$7,500. The limit applies to the total amount contributed to your traditional and Roth IRAs.

 

Income phase-outs also apply to Roth IRAs.

  • Single and Head of Household: $153,000-$168,000
  • Married filing jointly: $242,000-$252,000
  • Married filing separately: $0-$10,000.

 

SIMPLE IRAs

  • SIMPLE IRA limits will increase to $17,000 in 2026.
  • The catch-up contribution limit for employees 50 and over rises to $4,000.
  • And for employees aged 60, 61, 62 and 63, their catch-up contribution limit is $5,250.

 

Savers Credit

Some taxpayers are able to claim a tax credit for making eligible contributions to an IRA or employer-sponsored retirement plan. The Saver’s Credit, also known as the Retirement Savings Contributions Credit, is targeted to low and moderate income workers.

 

The 2026 income limit for the Saver’s Credit is:

  • $80,500 for married couples filing jointly
  • $40,250 for singles and married individuals filing separately
  • $60,375 for heads of household, up from $59,250 for 2025.

 

Defined Benefit Plans

Defined benefit plans aren’t as popular as they used to be—they’re typically associated with old-school pensions. However, they’re still around for some businesses who appreciate the deductions on the employer side available for contributions.

 

In 2026, the limit on the annual benefit under a defined benefit plan (how much you can receive from the plan) will increase to $290,000, up from $280,000. The contribution limit (additions to the plan) will increase to $72,000 from $70,000.

 

QLACs

A qualified longevity annuity contract (QLAC) allows you to convert funds in a qualified retirement plan—like a 401(k) or IRA—into an annuity. The dollar limit on premiums paid for a QLAC remains at $210,000 in 2026.

 

Qualified Charitable Distributions

A qualified charitable distribution (QCD) allows you to roll funds directly from your IRA to a qualified charity. Those amounts can be used to satisfy your required minimum distribution (RMDs) for the year and the amount donated is excluded from your taxable income.

 

The total amount of QCDs you can exclude from your gross income increases to $111,000 next year.

 

In addition, you can make a one-time election for a QCD to a split-interest entity. A split-interest qualified charitable distribution (QCD) is a special, one-time election that allows an individual to transfer funds directly from an Individual Retirement Account (IRA) to a specific charitable trust or annuity that provides an income stream back to the donor or their spouse for a set period.

 

The split-interest option is a way to combine philanthropic goals with the need for retirement income. The one-time amount is $55,000 in 2026.

 

Domestic Violence Victim Distributions

Generally, if you make early withdrawals from your retirement plan, you pay a 10% early withdrawal penalty. One exception to that rule is domestic violence victim distributions.

 

In 2026, domestic abuse victims can withdraw up to $10,500 or 50% of their vested plan balance, whichever is less. All or a portion of either type of distribution can be repaid to a 401(k) plan within three years from receipt.

 

 

Disclaimer:

This information is presented for informational purposes only and does not constitute an offer to sell, or the solicitation of an offer to buy any investment products. None of the information herein constitutes an investment recommendation, investment advice or an investment outlook. The opinions and conclusions contained in this report are those of the individual expressing those opinions. This information is non-tailored, non-specific information presented without regard for individual investment preferences or risk parameters. Some investments are not suitable for all investors; all investments entail risk and there can be no assurance that any investment strategy will be successful. This information is based on sources believed to be reliable and Alhambra is not responsible for errors, inaccuracies, or omissions of information. For more information contact Alhambra Investments at 1-888-777-0970 or email us at info@alhambrapartners.com.