The IRS has released Notice 2025-67, outlining cost-of-living adjustments to retirement plan contribution and income limits effective January 1, 2026. These updates affect contribution caps, catch-up provisions, and income thresholds across several tax-advantaged savings vehicles. Understanding how these changes apply to your situation can help ensure your retirement strategy remains aligned with your broader financial plan.
Key Retirement Plan Limit Changes
Below is a summary of select retirement-related limits for 2025 and 2026:
| Type of limitation | 2025 limit | 2026 limit |
| Elective deferrals to 401(k), 403(b), 457(b)(2) and 457(c)(1) plans | $23,500 | $24,500 |
| Annual benefit limit for defined benefit plans | $280,000 | $290,000 |
| Contributions to defined contribution plans | $70,000 | $72,000 |
| Contributions to SIMPLEs | $16,500 | $17,000 |
| Contributions to traditional and Roth IRAs | $7,000 | $7,500 |
| Contributions to HSAs – Self-only coverage | $4,300 | $4,400 |
| Contributions to HSAs – Family coverage | $8,550 | $8,750 |
| Catch-up contributions to 401(k), 403(b) and 457 plans for those age 50+* | $7,500 | $8,000 |
| Catch-up contributions to 401(k), 403(b) and 457 plans for those age 60, 61, 62 or 63* | $11,250 | $11,250 |
| Catch-up contributions to SIMPLE plans for those age 50 or older | $3,500 | $4,000 |
| Catch-up contributions to SIMPLE plans for those ages 60, 61, 62 or 63* | $5,250 | $5,250 |
| Catch-up contributions to IRAs for those age 50 or older | $1,000 | $1,100 |
| Catch-up contributions to HSAs for those 55 or older | $1,000 | $1,000 |
| Compensation for benefit purposes for qualified plans and SEPs | $350,000 | $360,000 |
| Minimum compensation for SEP coverage | $750 | $800 |
| Highly compensated employee threshold | $160,000 | $160,000 |
*New for 2026: Catch-up contributions must be made as Roth contributions if 2025 wages exceed $150,000.
IRA and Roth IRA Eligibility Considerations
Modified adjusted gross income (MAGI) continues to play a key role in determining eligibility and deductibility for IRA contributions.
Traditional IRA eligibility
- Individuals not covered by a workplace retirement plan may deduct the full amount of their contribution.
- For those covered by a workplace plan, deductibility is subject to income phase-outs:
- Single: $81,000–$91,000
- Married filing jointly (covered spouse): $129,000–$149,000
- Married filing jointly (non-covered spouse): $242,000–$252,000
Roth IRA eligibility
Participation in an employer-sponsored plan does not affect Roth IRA eligibility, but MAGI limits apply:
- Single or Head of Household: $153,000–$168,000
- Married filing jointly: $242,000–$252,000
The Shift to Mandatory Roth Catch-Up Contributions
Beginning in 2026, individuals earning more than $150,000 in 2025 wages will be required to make catch-up contributions to employer-sponsored retirement plans on a Roth basis. This represents a meaningful policy shift.
While this change eliminates the immediate pre-tax benefit for higher earners, it introduces the potential for tax-free withdrawals in retirement and may enhance long-term tax diversification. From a planning standpoint, the decision to accumulate more Roth assets should be evaluated in the context of current tax rates, expected future income, and overall estate and legacy goals.
Employers should also be aware that plans must offer a Roth feature in order to accommodate these required contributions.
Retirement Planning Within the Broader Financial Picture
For individuals and families evaluating their retirement strategy whether working with an advisor today or exploring their options contribution limits are only one piece of a much larger financial picture. Retirement accounts intersect with tax planning investment strategy cash flow needs estate considerations and philanthropic goals and decisions in one area often influence outcomes in another.
At Heritage Wealth Advisors we take an integrated approach to wealth management. Rather than focusing on individual rules or limits in isolation our teams coordinate across investments financial planning and tax strategy to help ensure each decision supports long term objectives. This perspective often referred to as the Heritage Advantage elevates planning beyond account level decisions and into a cohesive strategy designed to adapt as circumstances and regulations change.
As these updated limits take effect we welcome conversations with clients prospective clients and anyone seeking a more comprehensive view of retirement planning to discuss how these changes may fit into a broader financial framework.
