2026 brings one of the most consequential years for retirement planning in recent memory. Inflation-adjusted contribution limits rise across nearly every major retirement vehicle, while key provisions from SECURE 2.0 move closer to full implementation. At the same time, evolving tax law dynamics place greater emphasis on how and when business owners defer income.
For business owners—especially those operating S-corps or other pass-through entities—this convergence creates a meaningful planning window. Higher contribution limits expand retirement savings capacity, while changing tax considerations elevate the importance of coordinating retirement contributions with compensation and income planning.
If you’ve been asking, “How much can I contribute to a 401(k) in 2026?” or “What retirement planning moves should business owners consider in 2026?” this is the year to reassess strategy.
What’s New in 2026: Increased Retirement Contribution Limits
The IRS released its 2026 cost-of-living adjustments in Notice 2025-67, confirming increases across most retirement plan limits. These updated limits apply beginning with the 2026 plan year.
2026 Retirement Contribution Limits
| Plan / Account Type | 2025 Limit | 2026 Limit |
|---|---|---|
| 401(k), 403(b), governmental 457(b) elective deferrals (under age 50) | $23,500 | $24,500 |
| Catch-up contributions (age 50+) | $7,500 | $8,000 |
| “Super catch-up” (age 60–63, if plan allows) | $11,250 | $11,250 |
| Combined employer + employee contributions (defined contribution plans, excluding catch-up) | $70,000 | $72,000 |
| IRA contribution (under age 50) | $7,000 | $7,500 |
| SIMPLE plan elective deferral | $16,500 | $17,000 |
Important clarifications:
- Catch-up contributions are in addition to the $72,000 annual additions limit.
- IRA catch-up contributions remain separate and should be considered when modeling total savings.
- SIMPLE plans also have catch-up rules and, in some cases, enhanced limits for qualifying employers under SECURE 2.0.
These higher limits create immediate additional retirement savings capacity starting in 2026.
SECURE 2.0: What Applies in 2026 (and What Does Not)
SECURE 2.0 introduced multiple changes that affect retirement plans, but not all provisions take effect at the same time.
Catch-Up and Roth Compliance Timing
- The age 60–63 “super catch-up” limit applies in 2026 and remains unchanged from 2025.
- The Roth-only catch-up requirement for high earners is not generally mandatory until taxable years beginning after December 31, 2026.
- Final regulations confirm broad applicability beginning in 2027, with administrative transition relief and good-faith reliance permitted earlier.
- This requirement is separate from auto-enrollment rules and should not be described as already in effect for all plans.
Operational Implications for Employers
- Roth catch-up compliance is based on prior-year wages from the sponsoring employer.
- Plans that do not offer Roth contributions may need amendments before mandatory compliance applies.
- Adding designated Roth features requires plan amendments, separate accounting, payroll coordination, and employee communications.
For many employers, 2026 becomes a natural checkpoint year to review plan design before mandatory compliance arrives.
Where Tax Law Considerations Intersect With Retirement Strategy
While recent tax legislation is often discussed broadly, it’s important to be precise. Retirement plan contribution limits themselves are driven by the Internal Revenue Code and inflation adjustments—not by broader tax legislation.
That said, changes in deduction availability, income thresholds, and planning uncertainty increase the strategic value of retirement contributions for business owners. Higher contribution limits provide more flexibility to manage taxable income and build long-term savings within a defined, compliant framework.
The key takeaway: retirement planning in 2026 should be coordinated with compensation and income strategy, rather than treated as a standalone decision.
Strategic Retirement Planning Moves for Business Owners in 2026
With higher limits and approaching regulatory changes, business owners should consider the following actions.
Tactical Planning Opportunities
- Maximize elective deferrals: Contribute up to $24,500, plus applicable catch-up contributions.
- Leverage catch-up and super catch-up windows: Especially valuable for ages 50–63.
- Coordinate employer contributions: Profit-sharing contributions remain subject to compensation-based limits (often up to 25% of W-2 wages).
- Evaluate Roth vs. pre-tax contributions: Particularly in light of future compliance requirements and long-term tax diversification.
- Review plan design: Ensure your plan permits Roth contributions, catch-ups, and employer profit-sharing if desired.
Example: How an S-Corp Owner Could Save More in 2026
Scenario:
A 55-year-old S-corp owner with:
- $200,000 in W-2 wages
- $150,000 in pass-through profits
Potential 2026 Retirement Contributions
| Contribution Type | Amount |
|---|---|
| Elective deferral | $24,500 |
| Catch-up (age 50+) | $8,000 |
| Employer profit-sharing | $30,000 |
| Total contributions | $62,500 |
Key clarifications:
- Employer contributions are typically limited to a percentage of W-2 wages and must comply with plan terms.
- Total annual additions (employee + employer + any after-tax contributions) cannot exceed $72,000, excluding catch-ups.
- After-tax (non-Roth) employee contributions or “mega backdoor” strategies must be explicitly allowed by the plan and may be subject to nondiscrimination testing.
- After-tax contributions do not reduce taxable income, unlike pre-tax employee deferrals or employer contributions.
When structured correctly, higher 2026 limits allow business owners to accelerate retirement savings while managing near-term taxable income.
What Business Owners Should Do Now
- Review projected 2026 cash flow, W-2 wages, and distributions.
- Confirm plan features: Roth availability, catch-ups, profit-sharing, and after-tax options.
- Coordinate retirement contributions with compensation planning.
- Run multiple scenarios using 2026 limits to evaluate tax and retirement outcomes.
- Engage tax and benefits advisors early to avoid operational missteps.
Why 2026 Matters
With higher contribution limits, expanded catch-up opportunities, and upcoming compliance requirements, 2026 stands out as a pivotal planning year for business owners.
Those who proactively align compensation, plan design, and contribution strategy can:
- Build retirement balances more efficiently
- Reduce taxable income within the rules
- Prepare for regulatory changes before they become mandatory
The opportunity is real—but it requires deliberate planning.
If you need assistance evaluating how these 2026 retirement rules apply to your business, schedule a complimentary consultation with our team today for a focused planning conversation that can help prevent missed opportunities later.
