As I sit back, figuratively dusting off my “That 401(k) Conference” binder and sipping lukewarm coffee—the true fuel of every ERISA late-night writing session—here’s how I, Ary Rosenbaum, see the latest IRS release of the 2026 retirement plan limits: another year, another set of numbers that look simple on paper but carry real consequences for fiduciaries who don’t stay ahead of the curve.
1. The Big 2026 Changes
Here are the highlights you’ll be fielding questions about:
· 401(k)/403(b)/457(b) Elective Deferral Limit: $24,500
· Age-50+ Catch-Up: $8,000
· SECURE 2.0 “Super Catch-Up” (ages 60-63): $11,250
· Defined Contribution Annual Additions Limit: $72,000
· Compensation Limit: $360,000
· IRA/Roth IRA Contribution Limit: $7,500
· IRA Catch-Up: $1,100
· HCE Threshold: $160,000
· Key Employee Threshold: $235,000
· Starter 401(k) Deferral Limit: $6,000
These numbers aren’t just arithmetic—they’re compliance obligations waiting to trip up an unsuspecting plan sponsor.
2. Why These Numbers Matter
In true Ary fashion: the IRS doesn’t just change limits for fun—every adjustment creates a ripple of responsibilities.
· Plan Documents Need Updating: SPDs, plan instruments, and operational manuals must reflect the 2026 limits. Failure to update means operational defects.
· Payroll Coordination: This is where most plans stumble. If payroll doesn’t load the new limits properly, you’re looking at excess deferrals, corrective distributions, and a very unhappy audit team.
· Participant Communication: Every year, participants ask the same question—“How much can I put in?” Give them clear guidance, especially the 60-63 crowd who now get that super catch-up.
· Testing Implications: With new HCE and Key thresholds, nondiscrimination testing outcomes may shift. Early modeling will help avoid next year’s panic.
· Plan Design Strategy: These new limits are a natural point to revisit design—safe harbor, match formulas, eligibility windows, contribution structures, Starter 401(k) considerations, all of it.
3. Ary’s Fiduciary “To-Do” List
· Review plan documents and SPDs for necessary limit updates.
· Confirm payroll and recordkeeper systems are configured for January 1, 2026.
· Prepare participant communications and highlight catch-up and super catch-up opportunities.
· Run early nondiscrimination projections using the updated thresholds.
· Confirm whether your plan will actively support the 60-63 super catch-up, and prepare targeted messaging.
· Calendar the amendment deadline so you don’t find yourself racing in November.
· Brief the investment/plan committee on how the updated limits may affect participation and testing.
4. Final Thoughts
This is the yearly dance: the IRS gives us numbers, and we translate them into operational reality. But here’s the thing—handling these changes smoothly is one of the easiest ways a plan sponsor can demonstrate competence, care, and fiduciary diligence.
Every year I say the same thing: don’t let your plan be the one that forgets to update payroll. Excess deferrals and testing failures aren’t glamorous mistakes, but they’re the ones that sting.
Plan sponsors who get ahead of these adjustments show participants that they’re attentive, prepared, and committed to running the plan the right way. In an industry built on trust, that matters.
