2026 Contribution Limit Updates

The IRS has released the updated contribution limits for 401(k) plans, Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs), and other tax-advantaged benefits for 2026. These adjustments reflect annual cost-of-living changes and give employees new opportunities to save for healthcare and retirement. Below is a summary of the key updates employers should be aware of for the 2026 tax year.

Retirement Plan Contribution Limits

401(k), 403(b), 457, and TSP Plans

• Employee Contribution Limit: increased to $24,500.

• Catch-Up (Age 50+): increased to $8,000, allowing a total contribution of $32,500 in 2026.

• Super Catch-Up (Ages 60–63): remains $11,250.

IRA's

• IRA Contribution Limit: increased to $7,500.

• IRA Catch-Up (Age 50+): increased to $1,100.

Health & Welfare Benefit Limits

Health Savings Accounts (HSA)

• Individual Coverage: $4,400

• Family Coverage: $8,750

• Catch-Up (Age 55+): additional $1,000 annual contribution (regardless of individual or family coverage)

  
  

Flexible Spending Accounts (FSA)

• Health Care FSA Contribution Limit: increased to $3,400

• FSA Carryover Amount: increased to $680, if the employer plan allows carryovers

What This Means for Employers

Employers should review their benefit plans to ensure systems and documentation reflect the 2026 changes. Staying ahead of these updates helps employees maximize their benefits while supporting your organization’s compliance and financial wellness goals.

Recommended Employer Actions

• Update payroll and HRIS systems with new contribution caps

• Confirm employee communications, handbooks, and benefit summaries are up to date

• Remind employees of higher contribution opportunities during open enrollment and throughout the plan year

• Coordinate with benefit administrators to ensure compliance with IRS limits

Reach out to our consulting team for support with these important action items for 2026.