Have you been putting off optimizing your retirement contributions because you're not sure if it's worth the hassle? Maybe you've been hitting those frustrating contribution caps year after year.
You're not alone, and this year brings some welcome news that might finally give you the breathing room you've been waiting for.
The IRS just announced higher 401(k) and IRA contribution limits for 2026. If you've been hitting the caps or putting off optimizing your contributions, this is your moment to make meaningful changes.
The IRS announced updated retirement contribution limits for 2026. The changes are particularly meaningful if you've been hitting those frustrating caps.
401(k) contributions jump to $24,500 (up from $23,500). If you're 50 or older, you can add another $8,000 in catch-up contributions for a total of $32,500.
Your 60s become especially valuable: ages 60-63 get a "super catch-up" of $11,250 that replaces the standard $8,000 catch-up for that age group.
That means you could contribute up to $35,750 annually during these peak earning years.
IRA limits increase to $7,500 (from $7,000), with the same $1,100 catch-up for those 50+.
There's one important change to note: under SECURE 2.0, if your prior-year FICA wages (Box 3 on your W-2) exceeded $150,000 (indexed), your catch-up contributions to employer plans may be required to be made as Roth (after-tax) contributions as employers implement this requirement based on IRS guidance and plan readiness.
These aren't just incremental bumps. They represent a meaningful opportunity to accelerate your retirement timeline, especially if you've been constrained by the old limits.
The super catch-up provision creates a critical four-year window during what are often your highest earning years. If you're in your early 60s and have been feeling behind on retirement savings, this could be the game-changer you've been waiting for.
Here's what most people overlook: for high earners, the mandatory Roth treatment of catch-up contributions in employer plans actually creates an opportunity. While you'll pay taxes now instead of getting an immediate deduction, you're building a bucket of tax-free money for retirement.
Start with your current situation. Pull up your most recent pay stub and see what you're contributing now. If you're not maxing out, calculate what it would take to reach the new limits.
Automate the increase. Most 401(k) plans let you schedule contribution increases in advance. Set one for January 2026 so you don't have to remember later.
Maximize your age advantage. If you're 50+, make sure you're using catch-up contributions. If you're 60-63, the super catch-up provision gives you $11,250 in catch-up room instead of the standard $8,000.
Plan for the Roth requirement. If your FICA wages exceeded $150,000 last year, your catch-up contributions to employer plans may be required to be Roth as this SECURE 2.0 provision is implemented. Check with your plan administrator about how this works.
Review your IRA strategy. With higher limits and adjusted income thresholds, it might be time to revisit whether direct Roth contributions still make sense for your situation.
Higher contribution limits only create opportunity if you actually use them. The key insight here isn't just about the numbers. It's about recognizing that small, systematic changes during your peak earning years can dramatically accelerate your retirement timeline.
Start with one meaningful adjustment for 2026, whether that's increasing your 401(k) percentage or finally setting up that IRA contribution. Financial progress happens through consistent action, not perfect timing, and every step forward builds momentum.
If you'd like support creating a personalized plan that works with your habits and priorities, consider exploring our ADHD-friendly approach to financial planning.
You can also download our free Unbudget Lite tool to start building money management systems that actually stick.
Remember: you don't have to figure this out alone. Whether you're 60 or 30, behind on savings or ahead of schedule, there's always a next step that makes sense for where you are right now.