Authors: Steven Grieb Kelly Lazzara

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November 2025

Each year, the Internal Revenue Service (IRS) releases new retirement plan limits, as adjusted for inflation. The annual increases are written into the Internal Revenue Code, allowing the IRS to make the adjustments without the approval of Congress. The IRS recently issued the retirement plan limits for the 2026 year. Most limits related to retirement plans will be slightly increased.

For example, the individual deferral limit for 401(k) and 403(b) plans will increase from $23,500 to $24,500. Maximum compensation for purposes of determining annual accruals will rise from $350,000 to $360,000. And the limit for total defined contribution plan annual accruals will increase from $70,000 to $72,000.

Gallagher has prepared a chart walking through all the 2026 limits for qualified retirement plans. Plan sponsors should consider taking steps to inform participants about the 2026 adjustments to allow them to take advantage of the increased limits. While most participants aren't impacted by changes to the annual limits, some may want to modify their deferral elections for 2026 based on the new numbers.

ACCESS THE CHART

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