The IRS is giving Americans more room to grow their nest eggs. For the 2026 tax year, employees can contribute up to $24,500 into their 401(k), an increase from the $23,500 contribution limit in 2025 and the limit on annual contributions to an IRA has also increased to $7,500 in 2026, up from $7,000 in 2025. 

That means workers who want to maximize their retirement savings have the opportunity to set aside a little more tax-deferred income in the year ahead — which is key, especially as inflation continues to rankle consumer spending.

Here are a few ways to maximize the benefits of the new contribution limits and enhance your retirement strategy in the new year.

Revisit your contribution percentage

If you’ve been contributing the same percentage of your paycheck for years, now’s a good time to adjust it. Even a small increase, such as 1% or 2%, can have a meaningful impact over time, especially with higher limits in place.

According to Fidelity, boosting your 401(k) contribution by just 1% each year can significantly increase your retirement balance without dramatically affecting your take-home pay. For example, if you’re 25 years old, earning $60,000 a year, and contributing 3%, increasing that by one percentage point each year until you reach 10% could grow your retirement balance by tens of thousands of dollars more by age 65 — assuming steady market growth.

Take full advantage of employer matching

Employer matches are one of the biggest boosts to your retirement savings — and they’re essentially free money. Make sure you’re contributing enough to receive your company’s full match, which is often 3% to 6% of your salary, depending on your employer.

While the $24,500 limit applies only to your own contributions, the combined employee and employer cap is $72,000 for 2026. That means even if you’re not able to max out your own contributions, your employer match could help you get closer to that combined total.

Max out catch-up contributions

If you’re age 50 or older, you can contribute an extra $8,000 to your 401(k) or $4,000 to a SIMPLE IRA in 2026. These catch-up contributions can help you make up for earlier years when you might not have been able to save as much.

For example, if you’re 55 and contribute the full $24,500 plus the $8,000 catch-up, that’s $32,500 total in 2026 — money that grows tax-deferred until retirement.

Don’t forget your IRA

If you’re not eligible for an employer plan or want to supplement one, an IRA offers another way to boost retirement savings. The $7,500 annual limit applies whether you choose a traditional IRA (which gives you a tax break now) or a Roth IRA (which offers tax-free withdrawals in retirement, depending on income eligibility).

Some robo-advisors offer IRA contribution matches of up to 3%, especially for new account holders. For example, Acorns provides a 1% match on new contributions to your Acorns Later retirement account with their Silver subscription, and a 3% match with the Gold subscription.

For a $5 monthly fee, Robinhood Gold members can also receive up to a 3% IRA match on contributions, but to qualify, you must remain a Gold member for at least one year and keep the matched funds in your IRA account for a minimum of five years. If the Gold subscription is too costly, non-Gold members can still benefit from a 1% match on both IRA contributions and eligible transfers.

Keep in mind that Roth IRA contributions come with income limits. To contribute up to the full amount, your modified adjusted gross income has to fall below certain thresholds. For single filers and heads of household, the phaseout range is $153,000 to $168,000. For married couples filing jointly, it’s $242,000 to $252,000. If your income is above these thresholds, you won’t be able to make contributions.

Choosing the right retirement account depends on your financial goals, tax situation and employer benefits. If your workplace offers a 401(k), it’s often the best place to start, especially if your employer offers a matching contribution. But a Roth IRA can also be a powerful complement, as it can give you tax-free growth and more control over your investments. And if you don’t have access to a 401(k), a Roth IRA is an excellent alternative — especially if you expect to be in a higher tax bracket later in life.

We like the Roth IRA options at Fidelity because savers can choose to have the brokerage pick and manage their investments or do it themselves. Wealthfront also offers automated retirement portfolio management, allowing you to be completely hands-off.

And as you plan your retirement strategy for 2026, remember the clock is still ticking on maximizing your 2025 contributions. If you have the ability to contribute more before the year ends, now’s the time to do it.

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