The big news this week is the release of 2026 Retirement Plan contribution limits. We break down key changes below (source: Planadvisor.com):
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Individual Retirement Accounts (IRAs): Contribution limits increase to $7,500, with the catch-up contribution for those 50 or older increasing to $1,100. This means an individual over 50 can contribute $8,600.
401(k), 403(b), and 457 plans: Contribution limits increase to $24,500, with the catch-up contribution for those 50 or older increasing to $8,000. This means an individual over 50 can make a contribution of $32,500.
Individuals between 60 and 63 can make additional catch-up contributions of $3,750, with their total potential contribution amount increasing to $36,250.
Other important changes include that retirement plan participants over 50 cannot deduct their catch-up contributions if their FICA compensation amount was more than $145,000 in the 2025 tax year.
In other words, if your 2025 FICA wages were $145,001, and you are over 50, any catch-up contributions in 2026 will be treated as Roth contributions and will not be deducted from income.
The loss of the deduction is unfortunate, but not a reason to avoid catch-up contributions. Roth amounts can be very useful in retirement.
Additional cost-of-living adjustments have been made, including the phase-out amounts for deductible IRA contributions and Roth contributions.
The very dense official IRS notice can be found here.
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Q: The government shutdown is over. What is the impact?
A: A few things have occurred:
The Council of Economic Advisors estimates economic impact of $90 billion or so. The Congressional Budget Office thinks $11 billion of that is permanently lost. The CBO also expects it to have reduced 4th quarter GDP by as much as 1.5% but boosted GDP for the first quarter of 2026 as some activity is pushed to that year.
Some important government reports will not be released since the data was not collected during the shutdown. This may include October employment and inflation numbers. Other reports will be slower.
This will complicate the Federal Reserve’s December plans, as they won’t have the data they rely on. This might push back the timeline for further interest rate adjustments.