The IRS has announced updated contribution limits for 2026, including an important change to the FICA wage threshold that determines whether catch‑up contributions must be made as Roth.
Each year, the IRS adjusts contribution limits for 401(k) plans, IRAs, and other retirement accounts. One of the most impactful changes for 2026 involves the mandatory Roth treatment of catch‑up contributions for high‑income earners. Beginning January 1, 2026, if an eligible participant earned more than $150,000 in FICA wages in 2025, any catch‑up contributions must be made as designated Roth contributions.
There are two key points to keep in mind:
1. The designated Roth catch‑up requirement begins **January 1, 2026**.
2. The FICA wage look‑back threshold increases to **$150,000**.
Additional 2026 retirement plan updates include:
• Employee elective deferral limit increases to **$24,500**.
• Standard catch‑up contribution increases to **$8,000**.
• Special age‑60–63 “super catch‑up” increases to **$11,250**.
• IRA contribution limit increases to **$7,500**, with the IRA catch‑up at **$1,100**.
Finally, if you inherited an IRA from a non‑spouse after the SECURE Act, you may be required to take a Required Minimum Distribution (RMD) before year‑end (this year!). At a minimum, you will be subject to the 10‑year payout rule.
If you have questions about planning opportunities or how these rules apply to your situation, feel free to reach out.
