On November 13, 2025, the Internal Revenue Service announced the calendar year 2026 annual inflation adjustments for retirement benefit plans. The following are inflation adjusted limits for retirement benefit plans for 2025 and 2026.
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2025 |
2026 |
|
|
Retirement Plans—Defined Contribution Limits: |
|
|
|
Elective Deferrals—IRC 401(k), 403(b), 457(b) |
$23,500 |
$24,500 |
|
Catch-Up Contributions (age 50 plus) |
$7,500 |
$8,000 |
|
Catch-Up Contributions (age 60-63) |
$11,250 |
$11,250 |
|
Roth Catch-Up Prior-Year Wage Threshold* |
N/A |
$150,000 |
|
Emergency Savings Account Contribution Limit |
$2,500 |
$2,600 |
|
Domestic Abuse Withdrawal Limit |
$10,300 |
$10,500 |
|
Annual Contribution Limit |
$70,000 |
$72,000 |
|
Retirement Plans—Defined Benefit Limits: |
||
|
Annual Annity Benefit Limit |
$280,000 |
$290,000 |
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Retirement Plans—Other Adjustments: |
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|
Annual Compensation Limit |
$350,000 |
$360,000 |
|
Highly Compensated Employee Definition |
$160,000 |
$160,000 |
|
Key Employee Definition for Top-Heavy Testing |
$230,000 |
$235,000 |
|
Social Security: |
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|
Taxable Wage Base Compensation Limit |
$176,100 |
$184,500 |
*This change affects employers who are now implementing the new requirement that participants who had Social Security (FICA) wages over a specified amount in the preceding year must have “catch-up” contributions treated as after-tax Roth rather than pre-tax elective deferrals. The specified wage limit for implementing the Roth catch-up requirement for 2026 is now $150,000 of FICA wages in the preceding (2025) year.
Nixon Peabody’s Employee Benefits & ERISA lawyers are well-equipped to help employers and plan administrators navigate inflation-related tax adjustments and stay compliant with evolving employee benefits regulations. For more information on the content, please contact your Nixon Peabody attorney or the author of this alert.