Saving for retirement isn’t just about how much you set aside—it’s also shaped by the rules that govern retirement accounts. Recent updates under the SECURE Act 2.0, including changes to retirement contribution limits for 2026, have expanded contribution opportunities and introduced new planning considerations for many savers. Click here to download our Retirement Contribution Limits Guide for 2026.

Understanding how these changes affect common retirement accounts can help you evaluate whether your current approach still aligns with your long-term goals.

Updated Retirement Plan Contribution Limits

401(k), 403(b), and 457 Plans

For 2026, the IRS allows employees to contribute up to $24,500 to 401(k), 403(b), and most 457(b) plans through elective deferrals.

Individuals age 50 and older may make an additional $8,000 catch-up contribution, increasing their total allowable contribution to $32,500.

Under provisions introduced by the SECURE Act 2.0, individuals ages 60 through 63 may be eligible for an enhanced “super catch-up” contribution of up to $11,250, allowing total employee contributions of as much as $35,750, subject to plan design.

These expanded catch-up rules are intended to provide additional flexibility for individuals approaching retirement who may wish to accelerate savings during their later working years.

SIMPLE IRA

The contribution limit for SIMPLE IRAs is $17,000.

• Individuals age 50 and older may make an additional $3,500 catch-up contribution, bringing the total contribution limit to $20,500. This standard catch-up applies to individuals ages 50–59 and age 64 and older.
• Under SECURE Act 2.0, individuals ages 60 through 63 may be eligible for an enhanced catch-up contribution of up to $5,250, allowing total contributions of up to $22,250, depending on plan terms.

SEP IRA

SEP IRA contribution limits are based on compensation.

• Employers may contribute up to 25% of an employee’s compensation, with total contributions capped at $72,000.
• For contribution calculations, only compensation up to $360,000 may be considered.

Self-employed individuals calculate SEP IRA contributions differently. In most cases, contributions are limited to approximately 20% of net earnings after accounting for self-employment taxes. The exact percentage depends on how net earnings are calculated.

Traditional and Roth IRA

For 2026, the IRS allows individuals to contribute up to $7,500 annually to Traditional and Roth IRAs.

Individuals age 50 and older may make an additional $1,100 catch-up contribution, bringing their total allowable contribution to $8,600.

Roth IRA contributions are subject to income limits based on modified adjusted gross income (MAGI). For 2026, the Roth IRA contribution phase-out ranges are:

• Single filers and heads of household: $153,000 to $168,000
• Married filing jointly: $242,000 to $252,000
• Married filing separately: $0 to $10,000 (this range is not indexed for inflation)

Traditional IRAs do not have income limits for making contributions. However, whether a contribution is tax-deductible may depend on income and whether the individual (or their spouse) is covered by a workplace retirement plan.

Key Provisions Under the SECURE Act 2.0

Automatic Enrollment for New 401(k) Plans

Under the SECURE Act 2.0, most newly established 401(k) and 403(b) plans are required to automatically enroll eligible employees. This requirement took effect for plans established beginning in 2025 and applies to many plans created after that date.

Initial automatic contributions must generally fall between 3% and 10% of compensation, unless an employee opts out. Plans must also include automatic annual increases of 1%, continuing until the contribution rate reaches at least 10%, but not more than 15%, unless the participant chooses otherwise. Certain small businesses, new employers, and specific plan types are exempt from these rules.

Expanded Catch-Up Contributions for Ages 60–63

SECURE Act 2.0 introduced expanded catch-up contribution limits for individuals ages 60 through 63, allowing eligible participants to contribute more to certain workplace retirement plans during the years leading up to retirement. These higher catch-up limits apply in addition to standard age-50 catch-up contributions and are intended to provide greater savings flexibility later in a career.

SECURE Act 2.0 also established new Roth treatment rules for catch-up contributions for higher-income earners. Beginning in 2026, individuals whose prior-year wages exceed the IRS threshold (as indexed) are generally required to make catch-up contributions on a Roth (after-tax) basis, provided their plan offers a Roth option. Whether this requirement applies depends on compensation levels and plan design.

Saver’s Credit

The Saver’s Credit is based on income and tax filing status, as well as the amount contributed to eligible retirement accounts. Eligibility is determined using adjusted gross income (AGI), as defined by the IRS.

Depending on income, the credit may equal 0%, 10%, 20%, or up to 50% of eligible retirement contributions. The credit applies to the first $2,000 contributed per individual, or $4,000 for married couples filing jointly.

Income limits and credit percentages are set by the IRS and may be adjusted periodically.

Inherited IRA RMD Penalties

Penalties for missed Required Minimum Distributions (RMDs) from inherited IRAs remain in effect.

The standard penalty is 25% of the missed distribution. The penalty may be reduced to 10% if the error is corrected within the allowed timeframe.

Making the Most of Current Contribution Limits

Recent updates to retirement contribution limits may create opportunities to revisit how retirement savings are structured. Rather than focusing solely on maximum amounts, it can be helpful to consider how current rules fit within a broader financial plan. This may include:

• Reviewing existing contribution levels to see whether they still align with current income and goals
• Understanding how catch-up contributions work for those who are eligible
• Evaluating retirement plan options such as SEP or SIMPLE IRAs for self-employed individuals or small-business owners
• Being aware of automatic enrollment features that may apply to newly established workplace plans

Taking time to review these areas can help ensure retirement savings strategies remain aligned as circumstances and rules evolve.

Staying Informed as Retirement Rules Evolve

Retirement rules don’t stand still, and even small updates can affect how savings strategies work over time. Keeping track of contribution limits, income thresholds, and plan features can help reduce surprises and support more informed decisions as circumstances evolve.

If you’d like help understanding how current retirement rules fit within your broader financial picture, Navalign Wealth Partners is here to help you review your options and plan with clarity and confidence.