$1K Boost Projected for 2026 401(k) Employee Contribution Limit
It’s looking like a $1,000 boost in 2026 to the maximum 401(k) contribution limit for employees, according the final 2026 IRS Limits Forecast from Milliman (released Sept. 12), which would raise the limit from $23,500 this year to $24,500 next year.
Update – 2026 IRS Retirement Plan Contribution Limits All But Official
The workplace retirement plan market eagerly anticipates the annual release of the next year’s employee annual DC plan limit on elective deferral contributions under a 401(k), 403(b), or 457(b) plan. The Internal Revenue Service (IRS) will release the official 2026 contribution limits for employees who participate in 401(k), 403(b), and most 457 plans, as well as the federal government’s Thrift Savings Plan in late October or early November, after calculations are made following the release of September 2025 consumer price index data on Oct. 15, 2025.
Regarding the DC plan limit on elective deferral contributions, it should be noted that SECURE 2.0 permits plan sponsors to elect to treat qualified student loan payments as elective deferrals. Recognition of such loan payments may not exceed this limit—or, if less, the employee’s Internal Revenue Code (IRC) §415(c)(3) compensation for the year—reduced by the employee’s elective deferrals for the year.
When the August 2025 CPI was released on Sept. 11, it meant that 11 of this year’s monthly CPI rates are set and only the September 2025 CPI remains before the final 2026 annual limits can be determined.
The CPI as reported by the BLS for the 12 months ended August 31, 2025, was 2.9%, up from 2.7% for the 12 months ended July 31, 2025, and higher than the 2.4% annual change in the CPI as of September 30, 2024 (i.e., the close of the prior FFY). It is equal to the 2.9% average annual change over the past 10 years ended September 30, 2024, and higher than the 2.6% average annual change over the past 20 years ended September 30, 2024.
The CPI increased about 2.8% since September 30, 2024. Projecting a monthly increase of 0.25% for September 2025 results in an estimated annual increase factor of 2.9% for our 11-month actual/one-month forecast projection. There was no change in the projected limits from July’s forecast,” the Milliman release states.
“If the change in CPI in September is 0.7% or higher, the 2026 compensation limit will be $365,000 instead of $360,000 and the maximum annual addition for DC plans will be $73,000 instead of $72,000,” the Milliman forecast continued. That would be up from $70,000 in 2025.
The maximum annual addition to a defined contribution (DC) plan is the sum of any employee pre-tax or Roth elective deferral contributions (excluding catch-up contributions), employee non-Roth after-tax contributions, employer contributions (matching, profit-sharing, or other nonelective), and any reallocated forfeitures.
As for catch-up contribution limits for participants aged 50 and older, Milliman is forecasting a $500 bump from $7,500 to $8,000, but it’s a little more nuanced for just the age 60-63 crowd. While Mercer is projecting that catch-up contribution limits for employees ages 60-63 could rise from $11,250 this year to $12,000 in 2026, the Milliman forecast has the limit staying at $11,250 for another year. Another pair of forecasters, “The Finance Buff” Harry Sit and “The White Coat Investor” each projects it will rise from $11,250 to $11,500, an increase of $250.
Both the Mercer and Milliman forecasts agree on the $500 increase for catch-up contributions for participants aged 50 and older, and on the $1,000 increase from $23,500 to $24,500 for 401(k), 403(b) and eligible 457 plan elective deferrals (and designated Roth contributions).
IRAs and HSAs
It is widely expected that due to inflation, contribution limits for IRAs will rise in 2026 for the first time in a couple of years. The base contribution limit for Traditional and Roth IRAs is expected to increase by $500, going from $7,000 in 2025 to $7,500 in 2026 (if under age 50).
For those age 50 and over by Dec. 31, 2025, the catch-up contribution limit of $1,000 in 2025 is expected to increase by $100 to $1,100 in 2026.
Traditional and Roth IRAs share this contribution limit, meaning contributions can be split between them, but you can’t contribute $7,500 to each – $7,500 is the max total to IRAs of all types in 2026.
The IRS in May announced a moderate increase to Health Savings Account (HSA) contribution limits for 2026.
Individuals with self-only coverage under a high deductible health plan (HDHP) will have an annual limitation of $4,400, an increase of $100 compared to last year. Those with family coverage under a (HDHP) will see an annual limit of $8,750, or an increase of $200 compared to 2025 limits. Individuals who contribute to an HSA must first be enrolled in an HDHP.
2026 IRS Limit Projections
401(k), 403(b), or 457 plan employee contributions limit
• Milliman: $24,500, up from $23,500 in 2025
• Mercer: $24,500
• The Finance Buff: $24,500
• The White Coat Investor: $24,500
Catch-up contributions (age 50 and older)
• Milliman: $8,000, up from $7,500 in 2025
• Mercer: $8,000
• The Finance Buff: $8,000
• The White Coat Investor: $8,000
Catch-up contributions (age 60-63)
• Milliman: $11,250, same as $11,250 in 2025
• Mercer: $12,000
• The Finance Buff: $11,500
• The White Coat Investor: $11,500
Maximum annual addition for DC plans
• Milliman: $72,000 or $73,000, up from $70,000 in 2025
• Mercer: $72,000 or $73,000
• The Finance Buff: $72,000
• The White Coat Investor: $72,000
Annual compensation limit
• Milliman: $360,000 or $365,000, up from $350,000 in 2025
• Mercer: $360,000 or $365,000
• The Finance Buff: $360,000
• The White Coat Investor: $360,000
Highly Compensated Employee Dollar Amount
• Milliman: $160,000, same as 2025
• Mercer: $160,000 or $165,000
• The Finance Buff: $160,000
SEE ALSO:
• 2026 401(k) Contribution Limit on Track for $1,000 Increase: Milliman
• IRS Gives 2025 401(k) Contribution Limit a $500 Boost
• IRS Unveils Modest Growth for 2026 HSA Contribution Limits
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
