Delayed Announcement: The Government Shutdown Factor

The IRS has released the 2026 Contribution Limits, creating opportunities for business owners and high earners to improve long-term retirement plan performance. This year’s update came later than usual due to the record-long government shutdown, which stalled IRS operations and delayed the release of annual contribution limits. While the shutdown is over, it serves as a reminder of how external events can impact financial planning timelines.

Key Updates for 2026 Retirement Plans:

Employer-Sponsored Retirement Plans
(401k, 403b, 457, Thrift Savings Plan and similar)

  • Annual contribution limit: $24,500 (up from $23,500 in 2025)
  • Catch-up contribution for age 50+: $8,000 (up from $7,500 in 2025)
  • Total possible for age 50+: $32,500 (up from $31,000 in 2025)
  • Special catch-up for ages 60–63: $11,250 (unchanged from Secure 2.0)

These changes can influence payroll design, compensation packages and plan participation trends. Business owners may want to revisit deferral strategies, projected cash flow and employee education efforts to ensure their plans stay competitive.

Traditional and Roth IRAs

  • Annual contribution limit: $7,500 (up from $7,000 in 2025)
  • Catch-up for age 50+: $1,100 (up from $1,000 in 2025)

Income Phase-Outs

  • Traditional IRA deduction phase-out ranges:
    • Single: $81,000–$91,000
    • Married Filing Joint: $129,000–$149,000
  • Roth IRA contribution phase-out ranges:
    • Single: $153,000–$168,000
    • Married Filing Joint: $242,000–$252,000

For high-income earners, these shifts may impact Roth conversions, backdoor Roth strategies and year-end tax planning.

Saver’s Credit Income Limits

  • Married Filing Joint: $80,500
  • Head of Household: $60,375
  • Single/Married Filing Separately: $40,250

SIMPLE Plans

  • Standard: $17,000 (catch-up $4,000)
  • With ≤25 employees: $18,100 (catch-up $3,850)

These adjustments are particularly relevant for small employers evaluating cost-effective retirement plan options or looking to strengthen their benefits package.

Other Notable Items

  • Defined Contribution Plans: $72,000
  • Mandatory Roth Catch-up Wage Threshold: $150,000

Why These Increases Matter

Higher limits give business owners and key employees more ways to drive tax-advantaged growth during their peak earning years. Small increases can create significant long-term gains when paired with consistent saving and thoughtful investment strategy. As longevity rises and Social Security replaces a smaller share of retirement income, maximizing options inside employer-sponsored plans and IRAs becomes even more important.

For plan sponsors, the new limits also present opportunities to strengthen recruitment and retention by offering employees more flexibility and higher savings potential.

Questions?

A strategic approach can turn these new limits into real long-term value. The retirement plan services team at Adams Brown Wealth Consultants can help you assess how the 2026 limits align with your goals and identify opportunities to strengthen your overall plan.

Contact us today to evaluate your plan, explore tax-efficient opportunities and elevate your overall retirement plan performance.

 

Download the 2026 Contribution Limits Guide

 

About Adams Brown Wealth Consultants

Adams Brown Wealth Consultants is a nationally recognized financial advisory firm delivering holistic wealth management solutions for individuals, families and business owners. As a division of Adams Brown, a top CPA firm, the team integrates tax strategy, financial planning, estate planning, insurance and risk management and retirement plans into a seamless experience. As a fiduciary, the firm operates under a fee-based model and is committed to providing objective, client-first advice. At Adams Brown Wealth we go above+beyond® for our clients, acting as true strategic allies dedicated to supporting their growth at every stage of their journey.