The IRS has announced the new retirement plan limits for 2026. Highlights include:
- The compensation limit used in determining benefits and contributions for both defined benefit and defined contribution plans has increased from $350,000 to $360,000.
- For defined benefit plans (including cash balance), the maximum annual benefit for a participant with at least ten years of participation and a normal retirement age between 62 and 65 increased from $280,000 to $290,000.
- For defined contribution plans (profit sharing and 401(k) plans), the maximum annual contribution for a participant increased from $70,000 to $72,000. While this limit includes salary deferrals, any catch-up contributions would be in addition to this limit.
- The limit on salary deferrals for 401(k) plans increased from $23,500 to $24,500. The limit on catch-up contributions for 401(k) plans, which are available to participants who attain age 50 by the end of the calendar year, increased from $7,500 to $8,000.
- A higher catch-up contribution limit applies for participants in 401(k) plans who attain age 60, 61, 62 or 63 by the end of the calendar year. For 2026, this higher catch-up contribution limit remains at $11,250.
- A 401(k) plan participant with FICA wages over the highly paid individual (HPI) limit in the prior year will be required to designate their catch-up contributions in the current year as Roth contributions. For 2026, the HPI limit hasn’t been released yet, but the 2025 limit was increased from $145,000 to $150,000.
As 2026 approaches, now is the time to act if you want to set up a qualified plan for a 2025 calendar tax year. If you are interested in exploring the possibility of setting up a qualified plan for your business, please contact us.
You can find a printable version of the complete list of the new 2026 annual limits by visiting the Retirement Plan Limits page of our website.
