{"id":287479,"date":"2026-05-25T08:00:05","date_gmt":"2026-05-25T12:00:05","guid":{"rendered":"https:\/\/futbolete.com\/us\/?p=287479"},"modified":"2026-05-24T22:03:53","modified_gmt":"2026-05-25T02:03:53","slug":"irs-updates-limits-for-401k-and-ira-2026","status":"publish","type":"post","link":"https:\/\/futbolete.com\/us\/irs-updates-limits-for-401k-and-ira-2026\/","title":{"rendered":"Update your retirement plan: 2026 limits for 401(k) and IRA according to the IRS"},"content":{"rendered":"

On February 15, 2026, the Internal Revenue Service (IRS)<\/strong> released Circular 2026-04<\/a>. The main takeaway is that the 401(k) retirement plans<\/strong> contribution limit for most people remains at $24,500 for 2026. That’s unchanged from 2025 after the cost-of-living adjustment.<\/p>\n

But here’s something Vanguard pointed out in its January 2026 report (and yeah, they manage over $2.3 trillion in retirement money, so they know what they’re talking about): you actually need earned income to put money into a 401(k) or IRA.<\/strong><\/p>\n

That means cash from an inheritance, a gift, or passive investments like rental properties or stock dividends? Doesn’t count. No matter how much you have sitting there, if you didn’t work for it, you can’t use it to fund those accounts.<\/p>\n

IRS Issues New Notice on Retirement Savings<\/h2>\n

If you’re between 60 and 63 years old<\/strong>, you get a higher catch-up limit thanks to the SECURE 2.0 Act<\/strong>. According to IRS Notice 2026-12, the extra catch-up contribution for 2026 is $11,250<\/strong>. This means a 62-year-old whose employer allows catch-up contributions could stash away up to $35,750 in 2026. That’s $3,250 more than the standard $8,000 catch-up available to workers over 50<\/strong> outside that age window.<\/p>\n

Many people assume you have to choose between a 401(k) and an IRA<\/strong>. You don\u2019t. Vanguard\u2019s retirement guide (updated February 10, 2026) says the next: \u201cYou can have both a 401(k) and an IRA and use them together to save for retirement.\u201d Ain’t that nice?<\/p>\n

Comparing Your Tax-Advantaged Options<\/h2>\n

401(k)s<\/strong> generally offer higher contribution limits, while IRAs<\/strong> usually provide more investment options and greater personal control. For example, a 45-year-old journalist earning $90,000<\/strong> could contribute $24,500 to her workplace 401(k)<\/strong> \u2014 capturing her employer\u2019s 4% match<\/strong> \u2014 and still deposit another $7,500 into a traditional or Roth IRA, as long as her modified adjusted gross income (MAGI) stays within the allowed limits.<\/p>\n

On the IRA side, IRS Publication 590-A (2026) states that your total contributions to all traditional and Roth IRAs combined cannot exceed $7,500 in 2026<\/strong> ($8,600 if you\u2019re 50 or older).<\/p>\n

This is an aggregate limit, not per account. So if you put $4,000 into a traditional IRA, you only have $3,500 left for a Roth IRA (or $4,600 if you\u2019re over 50).<\/p>\n

Income-Based Contribution Limits<\/h2>\n

Roth IRAs have income restrictions that eliminate many high earners. According to Fidelity\u2019s February 2026 summary:<\/p>\n