As 2025 ends, we must look at what lies ahead in 2026.  And, with a new year comes new “limits.”

If you’re looking for an opportunity to save more for retirement, then the word limit may actually sound like good news.  That’s because—for once—the IRS is your friend.  Beginning January 1, 2026, the IRS has announced increased contribution limits for many retirement accounts.

Rising costs of living continue to put pressure on long-term savings, and these annual IRS adjustments are designed to help individuals stay on track for retirement.

Whether you’re saving through your employer-sponsored retirement plan — such as a 401(k), SIMPLE IRA or 403(b) —, or on your own through an IRA or Roth IRA, you certainly will want to take advantage of the additional dollars you’ll soon be allowed to sock away.

Let’s focus on participants in your company’s retirement plan. If you are unable to ‘max out’ your IRS-allowed contributions, that’s okay — try to contribute as much as you can and prioritize capturing any employer match when feasible. For example, if your company matches contributions up to 3%, aim to contribute at least 3% to receive the full match. Forgoing the employer match means giving up a contribution that can help grow your retirement savings over time. Actual results will vary based on contributions, fees, and investment performance; there are no guarantees.  If you can save more, then save more!

When determining how much to contribute, people most often think in terms of “percentage of compensation.”   A more helpful approach may be to determine the dollar amount you can afford to save per paycheck, then convert that number into a percentage.  The results may surprise you.  Ten percent of $50,000 ($5,000) is a lot less than ten percent of $100,000 ($10,000).  While saving higher percentages are great, saving higher dollars are even better.

For many workers, it isn’t until later in their careers that compensation allows them to maximize contributions.  If you feel like you need to “catch up”, don’t panic.  Once again, the IRS, offers a solution.  If you’re age 50 or older, you are eligible to save more than younger contributors. And if you’re between ages 60–63, you qualify for an even larger catch-up allowance.

No matter which type of retirement vehicle you use, remember the basics: start early, be consistent, and increase your contribution amount whenever possible. Your future self will thank you.

Below is a summary of the 2026 annual contribution limits for certain retirement accounts and employer-sponsored retirement plans.

Leigh D. Morton

Leigh Morton has been with Leavell since 1999. She has served in several positions during her tenure, to include Trading Coordinator and Assistant Investment Counselor. Now she focuses her expertise on Leavell’s retirement plan business, as well as working closely with individual clients. Leigh holds a B.S. in accounting from the University of South Alabama. She has enjoyed service in several non-profits, such as the Art Patrons League and Junior Auxiliary of the Eastern Shore. Spending time at the beach with her family is what she enjoys most.

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Important Disclosures: The statements and opinions expressed in this article are those of the authors as of the date of the article, are subject to rapid change as economic and market conditions dictate, and do not necessarily represent the views of Leavell Investment Management, Inc. This article does not constitute investment advice, is not predictive of future performance, and should not be construed as an offer to sell or a solicitation to buy any security or make an offer where otherwise unlawful. Investing in securities carries risk including the possible loss of principal. Individual circumstances vary. Past performance is no guarantee of future results.