Benefits and Contributions

2026 Limits

With the IRS’ newly announced 2026 contribution limits, employees and business owners alike have more potential than ever to maximize retirement savings through 401(k) plans.

These updates create timely opportunities to review and confirm that contribution limits and tax advantages are being fully utilized.

Below is a breakdown of the most notable updates as they pertain directly to Defined Contribution and Defined Benefit Plans.

(Increased limits from 2025 are shown below in bold)

Important Annual Limits	2026	2025
Maximum Employee Deferral Limit¹ (401(k), 403(b), & 457)	$24,500	$23,5000
Employee Catch-Up Contribution² (401(k), 403(b) & 457 - if age 50 or older by year-end)	$8,000	$7,500
Defined Contribution Maximum Limit³ (employee + employer contributions)	$72,500	$70,000
Defined Contribution Maximum Limit³ (employee + employer contributions, if age 50 or older by year-end)	$80,000	$77,500
Employee Compensation Limit	$360,000	$350,000
Key Employees Compensation Threshold	$235,000	$230,000
Highly Compensated Employees Threshold	$160,000	$160,000
Social Security Taxable wage Base	$184,500	$176,100
IRA Contribution Limit	$7,500	$7,000
IRA Catch-Up Contribution Limit	$1,100	$1,000
Defined Benefit Dollar Limit	$290,000	$280,000
SECURE 2.0 Act: Higher Employee Catch-up (401(k), if age 60-63)	$11,250	NEW

New Roth catch-up requirement:

Because of the SECURE 2.0 Act, beginning in 2026, employees with an income of $150,000 or more in 2025, are required to make catch-up contributions to a Roth account.

Impact on Business Owners:

Higher limits allow business owners to defer more income, reduce current tax liability, and accelerate retirement savings. Combined with SECURE 2.0 tax credits, the cost of starting a 401(k) retirement plan has never been lower and often covers most, if not all administrative fees.

Impact on Financial Advisors:

These updates translate into higher contributions and growing plan balances, which can increase assets under management. Additionally, the continuing rise in startup plans, driven by new tax incentives, creates more client opportunities. Advisors who proactively educate business owners on how to maximize these limits and apply SECURE 2.0 Tax credits, position themselves as trusted strategic partners.

At Trinity, we help financial advisors design retirement plans that maximize tax efficiency, align with business goals, and deepen client relationships.

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