Understanding the annual IRS limits for your retirement plan is key to maximizing your financial future. For 2026, participants in 401(k) plans can contribute up to $24,500 through elective deferrals, an increase from $23,500 in 2025. Those age 50 and older can make an additional catch-up contribution of $8,000. Furthermore, individuals aged 60, 61, 62, and 63 may be eligible for a higher catch-up contribution of $11,250, if their plan allows.

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For both 401(k) and profit-sharing plans, which are types of defined contribution plans, the total contribution limit (including employee and employer contributions, and any forfeitures) for 2026 has risen to $72,000 from $70,000 in 2025. The maximum amount of annual compensation that can be taken into account for these plans in 2026 is $360,000, up from $350,000 in 2025.

 

For defined benefit pension plans, the maximum annual benefit that can be funded for a participant retiring in 2026 is $290,000, an increase from $280,000 in 2025. The same annual compensation limit of $360,000 for 2026 also applies when determining benefits and contributions for these plans.