6 Changes to IRAs, 401(k)s and HSAs in 2026

The coming 2026 changes to IRAs and 401(k)s offer new opportunities to save more for retirement, but you need to understand the new rules. This means keeping track of changes like higher contribution limits and updated requirements for withdrawing money from your accounts.

So, what's on deck for 2026? The major changes coming to retirement plans and accounts in 2026 are primarily driven by the SECURE 2.0 Act and the annual inflation adjustments. The most significant change to be aware of involves catch-up contributions for high earners.

1. Catch-up 401(k) contributions for higher earners over 50 must be made to a Roth

This rule requires that certain high-income earners must make their age 50 and older catch-up contributions to their 401(k), 403(b) or governmental 457(b) plans on a Roth or after-tax basis.

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The primary change is a shift from an upfront tax deduction to tax-free withdrawals in retirement. This eliminates a significant pre-tax deduction for high-earners nearing retirement, effectively requiring them to pay income tax on the catch-up portion of their savings now rather than in retirement.

Who is affected? The rule applies to any participant who meets both of the following criteria:

• Age: The participant is age 50 or older or will turn 50 during the year
• Wages: The participant's FICA wages (Social Security wages, typically Box 3 of Form W-2) from the employer sponsoring the plan exceeded $150,000 in the prior calendar year.

If you are a high earner, with over $150,000 in FICA wages in 2025, and are 50 or older, you will no longer be able to deduct your catch-up contributions from your current year's taxable income. That income threshold will be adjusted for inflation in the future.

For affected high-earners, any catch-up contributions — $8,000 in 2026 (up $500 from $7,500 in 2025) —made to their employer-sponsored plan must be designated as Roth or after-tax contributions. High-earners lose the option to make those catch-up contributions on a pre-tax basis.

If your employer's plan does not offer a Roth contribution feature, then all participants who are subject to the high-earner rule will be prohibited from making any catch-up contributions to that plan.

Action to consider now: If you are age 50 or older and your income is close to or over the $150,000 threshold, you should consult with your plan administrator, financial or tax adviser to understand how the mandatory Roth catch-up rule will affect your retirement savings strategy for 2026.

2. 401(k), 403(b), and 457(b) plan contributions go up in 2026

The annual announcement of increased contribution limits for employer-sponsored retirement plans, such as 401(k)s, 403(b)s, and 457 plans, is a critical opportunity for employees to accelerate their savings and secure a stronger financial future.

These higher ceilings allow workers — especially those utilizing catch-up contributions as they approach retirement — to defer more income into tax-advantaged accounts, boosting their potential for long-term compound growth and maximizing their immediate tax benefits.

As the Social Security trust fund is on shaky ground, some experts recommend saving more to cover any potential shortfall. How much more? The experts at Pension Bee suggest people save an additional $138,000 in additional savings to generate the same income if Social Security is reduced, based on the 4% withdrawal rule.

3. Traditional and Roth IRA limits for 2026

While there is no income limit when contributing to a traditional IRA, the ability to deduct that contribution is phased out based on your income and whether you (or your spouse) are covered by a workplace retirement plan.

If you are not covered by a workplace plan but your spouse is, you can still take the deduction, but your joint income will affect it.

If neither you nor your spouse is covered by a retirement plan at work, you are not subject to any income limitations and can take a full deduction for your traditional IRA contributions up to the annual limit, regardless of your Modified Adjusted Gross Income (MAGI).

Here are the contribution limits and MAGI phase-out ranges for making deductible contributions to a traditional IRA for the 2026 tax year:

If only one spouse is covered by a workplace retirement plan, you will have a higher phase-out range. For married couples filing jointly:

• Full deduction if MAGI is: $242,000 or less (up from $236,000 in 2025)
• Partial deduction if MAGI is between: $242,001 and $252,000 (up from a range of $236,001 and $246,000 in 2025)
• No deduction if MAGI is: $252,000 or more (up from $246,001 or more in 2025)

4. Expanded savings for small businesses and the self-employed

For small business owners and the self-employed, the annual increase in retirement plan contribution limits is a powerful development that offers significant opportunities to boost tax-advantaged savings.

The higher contribution ceilings for plans like the SEP IRA, Solo 401(k), and SIMPLE IRA allow business owners to defer greater amounts of income for both themselves and their employees.

This move is key for maximizing retirement readiness, benefiting from larger immediate tax deductions and making their plans more competitive for attracting and retaining talent.

For solo 401(k) accounts. You're also allowed to contribute up to 25% of compensation (after Social Security and Medicare taxes) as the employer profit-sharing contribution. The employer (profit-sharing) contribution limit remains up to 25% of compensation, with an overall compensation cap of $360,000 for 2026.

5. Paper statement requirement

You may find something new in your mailbox in 2026. Defined contribution plans, such as 401(k)s), must provide their participants with at least one paper statement per calendar year, unless the you specifically elect to receive statements electronically. Defined benefit plans must provide one every three years.

6. Health savings accounts (HSAs)

Paying for health care can be challenging before and after retirement. One way to save ahead for medical expenses in retirement is by contributing to a health savings account (HSA) before you enroll in Medicare. These accounts offer a triple tax benefit because contributions are made pre-tax (or are tax-deductible if you contribute after-tax), your contributions grow tax-free, and withdrawals are tax-free when used for qualified medical expenses.

After age 65, you can withdraw funds for any non-medical reason without a penalty; the withdrawals will simply be taxed as ordinary income, similar to a traditional IRA.

The limits below determine if your health plan is eligible to be paired with an HSA.

The catch-up contribution is available to an individual who is age 55 or older by the end of the tax year and is not enrolled in Medicare. If both spouses are 55 or older and not enrolled in Medicare, they can each contribute the $1,000 catch-up amount, but they must do so in separate HSA accounts.

Here are the official contribution limits, minimum deductible and maximum out-of-pocket limits for an HSA-qualified high deductible health plan (HDHP) in 2026:

Tip: You can use HSA distributions to reimburse yourself for your Medicare Part B and D premiums, co-pays, deductibles and coinsurance. However, Medigap premiums aren't considered qualified medical expenses and would be subject to income tax.

2025 year-end deadlines

Take a moment to review your retirement accounts before 2025 ends. See where you still have opportunities to invest or correct some potentially costly errors.

• 401(k) Contribution limits and deadlines. For most 401(k) plans, the deadline to contribute is December 31, 2025. This deadline also applies to participants who are 50 or older at the end of the calendar year 2025.
• IRA Conversion deadline. The deadline for converting a traditional IRA to a Roth IRA is December 31, 2025.
• Excess contributions. If you exceed the 2025 IRA contribution limit, you can withdraw excess contributions from your account by the due date of your tax return (including extensions). If you don't, you must pay a 6% tax each year on the excess amounts left in your account.
• Required minimum distributions (RMDs). Remember that you face an excise tax on any RMD that you fail to take on time. You must calculate the RMD separately for each IRA that you own other than any Roth IRAs, but you can withdraw the total amount from one or more of your non-Roth IRAs.

Related Content

• Six Changes Coming to Social Security in 2026
• 9 Medicare Changes Coming in 2026
• Nine Things You Need For a Complete Retirement Plan
• New IRS Start Date for Mandatory Roth Catch-Up Contributions