New Dollar Limits Applicable to Retirement Plans for 2026
The Internal Revenue Service and the Social Security Administration have announced the cost of living adjustments (COLA) applicable to dollar limitations for retirement plans and the Social Security wage base for 2026. Many of the limits that applied to the 2025 plan year changed for the 2026 plan year.
Employers should make sure that the individuals responsible for their payroll processing are aware of these limits. Also, employee communications and forms should be reviewed and updated as necessary to reflect these 2026 dollar limits.
Compensation and Retirement Plan Limits
| Description | 2026 | 2025 |
|
Maximum annual compensation that may be taken into account for determining benefits or contributions |
$360,000 |
$350,000 |
|
Maximum employee elective deferral contribution amount for employees who participate in 401(k), 403(b) and most 457 plans |
$24,500 |
$23,500 |
|
Maximum 401(k) and 403(b) and governmental 457(b) catch-up contribution amount for participants age 50 or older |
$8,000 |
$7,500 |
|
Special catch-up provision for participants age 60 through 63 |
$11,250 |
$11,250 |
|
Roth catch-up wage threshold (reflects FICA wages paid in 2025) |
$150,000 |
N/A |
|
Defined contribution and SEP maximum annual addition* |
$72,000 |
$70,000 |
|
Defined benefit maximum annual benefit |
$290,000 |
$280,000 |
|
Key employee compensation for top-heavy plan |
$235,000 |
$230,000 |
|
Pay threshold for determining highly compensated employee (HCE) |
$160,000 |
$160,000 |
|
SIMPLE standard salary deferral limit |
$17,000 |
$16,500 |
|
SIMPLE small employer salary limit** |
$18,100 |
$17,600 |
|
Age 50+ catch-up limit for SIMPLE Retirement Accounts |
$4,000 |
$3,500 |
|
SIMPLE small employer special age-50 catch-up contribution limit** |
$3,850 |
$3,850 |
|
SIMPLE age 60-63 catch-up contribution limit |
$5,250 |
$5,250 |
|
SEP coverage minimum compensation |
$800 |
$750 |
|
SEP compensation limit |
$360,000 |
$350,000 |
|
Social Security taxable wage base (FICA) |
$184,500 |
$176,100 |
*Limit not applicable to catch-up contributions.
** For SIMPLE plans with 25 or fewer participants and SIMPLE plans with 26 to 100 participants with 4% match or 3% nonelective contribution.
As highlighted in our prior client alert, earlier this year the IRS issued the 2026 limits applicable to HSAs and HDHP (see Rev. Proc. 2025-19, May 1, 2025), and more recently the IRS issued other dollar limits applicable to health and welfare benefits. (See Rev. Proc. 2025-32, Oct. 29, 2025).
If you have any questions concerning the plan dollar limits or would like assistance with your employee retirement plans, please contact any member of our Employee Benefits practice group.
Source: IRS Notice 2025-67