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The IRS is boosting retirement plan contribution limits in 2026, allowing Americans to put more money in their tax-preferred 401(k) and individual retirement accounts.

The tax agency, which the new contribution thresholds on Thursday, adjusts those account limits annually to account for inflation. Without these increases, people saving for retirement would have a harder time sheltering income from taxes and inflation. 

The new 401(k) and IRA plan limits for 2026 are as follows:

Even with the IRS raising retirement savings limits each year to keep pace with inflation, many Americans still feel financially unprepared for life after their working lives end. Only about four in 10 say they're on track to maintain their current lifestyle in retirement,  to recent research from Vanguard.

A Goldman Sachs report published last month found that 42% of working Americans, from Gen Z through Gen X,  after covering basic living expenses. 

With so many households stretched thin, relatively few workers can take full advantage of tax-advantaged plans. Vanguard found that  contributed the maximum amount to their 401(k)s in 2024 — a group that tends to be older and earn higher incomes.