Participants in 401(k)s will likely see a $1,000 boost to the amount they can contribute in 2026 — jumping from $23,500 in 2025 to $24,500 next year, according to Milliman's 2026 Internal Revenue Service Limits Forecast.
The consulting firm estimates 403(b), most 457 plans and the federal Thrift Savings Plan will also see a $1,000 increase in 2026.
The IRS released its contribution limits for 2025 last November, increasing the cap by $500.
Under a change made in the Secure 2.0 Act, a higher catch-up contribution limit applies for employees age 60 to 63 who participate in these plans. For 2025, the higher catch-up contribution limit is $11,250 instead of $7,500.
Milliman's limits forecast is projected using two assumption sets: one based on the current trailing 12 months of Consumer Price Index and the second assumes that year-to-date CPI (since Sept. 30, 2024) will continue to increase each month through Sept. 30, 2025 by an estimated 25 basis points, or 3% year over year.
Inflation in the 12 months ending March 31 was 2.4% as reported by the U.S. Bureau of Labor Statistics on April 10, Milliman states. Since Sept. 30, 2024, the CPI has increased about 1.4%.
After the close of federal fiscal 2025 on Sept. 30, the IRS will use the 12 months of the reported CPI to calculate the 2026 IRS limits. The new numbers are expected to be released in October or November.
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