The IRS raised the 2026 401(k) employee deferral limit to $24,500, a $1,000 increase from the 2025 cap of $23,500, under IRS Rev. Proc. 2025-32. Simultaneously, the Social Security Administration applied a 2.5% COLA effective January 2026, pushing the average retired-worker benefit to roughly $1,976 per month.
The $24,500 401(k) Limit and Who Gets the $11,250 Super Catch-Up
The standard employee deferral cap for 401(k), 403(b), and most 457 plans is $24,500 for 2026. Workers who are 50 or older by December 31, 2026 can add a standard catch-up contribution of $8,000, bringing their total to $32,500.
SECURE 2.0 created a separate, higher catch-up tier for participants who turn 60, 61, 62, or 63 in 2026. Their catch-up ceiling is $11,250 — not $8,000 — yielding a combined maximum of $35,750. Workers who turn 64 or older in 2026 revert to the standard $8,000 catch-up; the super catch-up window closes at age 64.
Employer contributions are not counted against the employee deferral cap. The combined employee-plus-employer limit (IRC §415) for 2026 is not listed in the IRS release excerpt above, but the employee-side numbers above are the figures most workers need to instruct their payroll departments.
2026 IRA Limits: $7,500 Base, $8,600 at Age 50+
The IRA contribution limit for 2026 is $7,500 for all taxpayers under 50. That figure covers both traditional and Roth IRAs combined — you cannot contribute $7,500 to each. The age-50-and-older catch-up for IRAs is $1,100 in 2026, lifting the ceiling to $8,600.
Note that the IRA catch-up is now indexed to inflation under SECURE 2.0, which is why it moved from $1,000 to $1,100. Roth IRA income phase-outs for 2026 were adjusted upward with the bracket indexing in Rev. Proc. 2025-32; confirm current phase-out ranges at IRS.gov before contributing.
| Contribution Limit | 2025 | 2026 |
|---|---|---|
| 401(k) employee deferral | $23,500 | $24,500 |
| 401(k) catch-up age 50+ | $7,500 | $8,000 |
| 401(k) super catch-up ages 60–63 | $11,250 | $11,250 |
| IRA base limit | $7,000 | $7,500 |
| IRA catch-up age 50+ | $1,000 | $1,100 |
| HSA self-only | $4,300 | $4,400 |
| HSA family | $8,550 | $8,750 |
| FSA | $3,300 | $3,400 |
HSA and FSA Limits for 2026: $4,400 Self-Only, $8,750 Family
Health Savings Account contributions for 2026 are capped at $4,400 for self-only coverage and $8,750 for family coverage. The HSA catch-up for account holders 55 and older remains $1,000 and is not indexed. A 55-year-old with family coverage can therefore deposit up to $9,750 in 2026.
Flexible Spending Account contributions rise to $3,400 for 2026. Unlike HSAs, FSA funds are subject to the use-it-or-lose-it rule (with a limited rollover or grace-period option at employer discretion). Business mileage reimbursed at the 70 cents per mile IRS standard rate is fully deductible for 2026.
Social Security 2026: 2.5% COLA, $176,100 Wage Base, and the $4,018 FRA Maximum
The 2.5% COLA announced by SSA.gov in October 2025 took effect with January 2026 benefit payments. The average retired worker now receives roughly $1,976 per month; the maximum benefit for a worker claiming at full retirement age is approximately $4,018 per month.
The Social Security taxable wage base for 2026 is $176,100. Earnings above that threshold are not subject to the 6.2% employee Social Security payroll tax (or the 12.4% self-employment tax equivalent). Medicare’s 1.45% tax has no wage ceiling and the 0.9% Additional Medicare Tax applies above $200,000 single / $250,000 married.
Full Retirement Age for everyone born in 1960 or later is 67. If you claim before FRA and continue working, the earnings test applies: in 2026, SSA withholds $1 for every $2 earned above $23,400. In the calendar year you reach FRA, the threshold rises to $62,160, with $1 withheld per $3 above that amount. Withheld benefits are not lost permanently — SSA recalculates your benefit upward at FRA to credit the months withheld.
Medicare Part B at $206.50/Month and IRMAA Starting at $106,000 in 2026
The standard Medicare Part B premium for 2026 is $206.50 per month, up from $185.00 in 2025. The Part B deductible is $257 for 2026. Most Medicare beneficiaries pay the standard premium; higher earners pay Income-Related Monthly Adjustment Amounts (IRMAA) on top of it.
IRMAA surcharges for Part B (and Part D) begin when your 2024 modified adjusted gross income exceeds $106,000 for single filers or $212,000 for married-joint filers, per Medicare.gov. Those thresholds are based on a two-year lookback — your 2026 premiums are determined by your 2024 tax return. If your income dropped significantly in 2024 or 2025 due to retirement or another life-changing event, you can request an IRMAA reconsideration using SSA Form SSA-44.
You are 61 years old in 2026, earning $95,000, and your employer offers both a traditional 401(k) and a Roth 401(k). You want to maximize your retirement contributions this year. Your marginal federal rate is 22% now, and you expect a lower rate in retirement.
2026 Standard Deduction: $15,750 Single, $31,500 Married, and Bracket Indexing of ~2.7%
The standard deduction for the 2026 tax year (returns due April 15, 2027) is $15,750 for single filers, $31,500 for married filing jointly, and $23,625 for heads of household. These figures apply to income earned in 2026. The filing deadline for your 2025 return is April 15, 2026 — today, if you are reading this on publication date.
All seven tax brackets were indexed approximately 2.7% upward from 2025 levels under Rev. Proc. 2025-32. The top marginal rate of 37% remains unchanged in rate; only the income thresholds moved. The annual gift tax exclusion is $19,000 per recipient in 2026, and the federal estate tax exemption is $13.99 million per individual.
Child Tax Credit at $2,200 and the $19,000 Gift Exclusion for 2026 Filings
The Child Tax Credit for the 2025 tax year — reported on returns filed by April 15, 2026 — is up to $2,200 per qualifying child under 17. This is a per-child maximum; phase-outs begin at $200,000 AGI for single filers and $400,000 for married-joint filers.
Confirm your employer’s plan allows the full $24,500 employee deferral limit for 2026 by reviewing your Summary Plan Description or contacting HR before January 1, 2026 *
Verify your age eligibility: confirm you will be 50 or older in 2026 to claim the catch-up contribution (expected ~$7,500 extra) or age 60–63 for the enhanced SECURE 2.0 catch-up limit *
Check the 2026 Social Security wage base (expected ~$176,100) to understand how FICA taxes interact with your gross pay and net take-home after deferral changes *
Calculate the total combined limit (employee + employer contributions) not exceeding the IRS 415(c) limit (expected ~$70,000 for 2026) if your employer offers matching or profit-sharing
Update your payroll deferral election form or online benefits portal before your employer’s open enrollment deadline, typically in November or December 2025
Review your 2025 W-2 or final pay stub to confirm you did not exceed the 2025 deferral limit ($23,500) before projecting your 2026 contribution rate
For gifts made in calendar year 2026, the annual exclusion is $19,000 per recipient, up from $18,000 in 2025. A married couple can jointly gift $38,000 to a single recipient without filing a gift tax return. Amounts above the annual exclusion reduce the lifetime estate and gift tax exemption of $13.99 million.
No-Income-Tax States and the $7.25 Federal Minimum Wage in 2026
Nine states impose no broad-based individual income tax in 2026: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire taxes only interest and dividends at a reduced rate phasing to zero, so it is included in most official counts. Residents of these states keep the full benefit of higher contribution limits without a state-level offset.
The federal minimum wage remains $7.25 per hour — unchanged since 2009. Multiple states raised their own minimums on January 1, 2026; workers in those states are paid the higher state rate. The IRS standard business mileage rate for 2026 is 70 cents per mile, relevant for self-employed individuals and unreimbursed business travel where deductible.
SSA will announce the 2027 COLA in October 2026, and the IRS will publish 2027 contribution limits via a new Revenue Procedure expected in late October or November 2026.
Frequently Asked Questions
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