The IRS has introduced several 2026 retirement plan updates that could influence how you save and invest—from higher contribution limits and Roth 401(k) rules to changes in HSA and estate tax thresholds. These adjustments provide an opportunity to revisit your financial plan and align your strategy with the year ahead.

As 2026 approaches, the IRS has announced several updates that could affect your retirement savings, health savings accounts, and estate planning strategies. These annual adjustments—ranging from higher contribution limits to expanded income thresholds—offer a valuable opportunity to review your financial plan and ensure you’re taking advantage of benefits available.

At Winthrop Wealth, our goal is to help you stay informed and confident. Understanding these updates and how they fit into your broader financial picture can help you make smarter decisions for your future. 

Retirement Account Inflation Adjustments 

The 2026 contribution limits for qualified retirement accounts—such as 401(k), 403(b), and 457 plans—are projected to increase from $23,500 to $24,500, according to early forecasts by Milliman and Mercer. If you’re 50 or older, your catch-up contribution will rise to $8,000, and for those ages 60–63, there’s a new higher catch-up limit of $11,500—allowing you to save more as retirement draws closer.

Another key change beginning January 1, 2026: if your 2025 wages exceed $145,000, your catch-up contributions must be made to a Roth 401(k) or 403(b) account. This means contributions will be after-tax, but future withdrawals will be tax-free—a valuable long-term benefit. 

IRA and Roth IRA Limits 

The IRA and Roth IRA contribution limit will increase to $7,500 in 2026, with a $1,000 catch-up for individuals age 50 or older. Adjusted Gross Income (AGI) limits for deductible traditional IRA contributions are expected to increase to:

• Single or Head of Household: $81,000 – $91,000
• Married Filing Jointly (covered by a plan): $129,000 – $149,000
• Married Filing Jointly (spouse covered): $242,000 – $252,00

Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.

For Roth IRAs, the phase-out ranges are projected at:

• Single/Head of Household: $153,000 – $168,000
• Married Filing Jointly: $242,000 – $252,000

A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply. 

Small Business and SEP/SIMPLE IRA Updates 

If you own a business or are self-employed, contribution limits for SIMPLE IRAs and SEP IRAs are also expected to increase:

• SIMPLE IRA: $17,000 (under 50), $8,000 catch-up for 50+, and $11,500 for ages 60–63
• SEP IRA: $72,000 maximum contribution (up from $70,000)

These updates create more room for retirement savings and potential tax deductions—important for anyone balancing business growth and long-term goals. 

Defined Contribution & Defined Benefit Plans 

• Defined Contribution Plans: Maximum funding limit increases to $72,000
• Defined Benefit Plans: Annual benefit limit rises to $290,000

These higher thresholds can make it easier for employees and employers to contribute more toward future financial security. 

Health Savings Accounts (HSAs) 

For those with high-deductible health plans, HSA contribution limits for 2026 will increase to $4,400 for individuals and $8,750 for families, with a $1,000 catch-up for those age 55 and older. HSAs are one of the few investment vehicles offering triple-tax benefits: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free as well. 

Gift and Estate Tax Updates 

The annual gift tax exclusion is expected to remain at $19,000 per beneficiary, while the lifetime estate and gift tax exemption increases to $13.99 million per person (up from $13.61 million in 2025). While these figures apply primarily to larger estates, they serve as a reminder that proper estate planning—no matter the size of your estate—can help ensure your assets are transferred efficiently and in accordance with your wishes. 

Bringing It All Together 

At Winthrop Wealth, we believe that smart financial planning is about connection—linking your investments, savings, taxes, and goals into one cohesive plan.

The 2026 updates provide an excellent opportunity to revisit your financial strategy, adjust contributions, or explore new tax-efficient ways to save. Whether you’re preparing for retirement, building your family’s financial foundation, or planning your next chapter, these updates are a reminder of the importance of staying proactive and informed.

If these changes have you thinking about your next steps, reach out anytime—we’re here to help you feel informed, prepared, and supported every step of the way.