Contribution Limits & Key Planning Numbers to Know for 2026

Dec 15 2025 | Back to Blog List

If you've been following the headlines, you know 2026 isn't exactly arriving on a wave of confidence. Markets are shifting, policy debates continue, and the global landscape feels anything but predictable. Here's some good news, however: when it comes to the federal tax code, things are actually settling down.

Thanks to 2025’s One Big Beautiful Bill Act (OBBBA), many tax provisions that were set to expire have been extended or clarified instead. That means contribution limits and deductions are changing in more predictable ways, and some widely used tax planning strategies for high-net-worth families are staying put—at least for now.

For our clients, this stability matters. It creates a clearer runway for long-term planning at a time when clarity can feel scarce. Higher contribution limits may support retirement savings, and wider tax bracket thresholds allow for more strategic income timing.

Below, we walk through the contribution limits, tax brackets, and deduction changes you need to know for 2026, and explain why these updates matter for thoughtful, tax-aware planning in the years ahead.

In this guide:

• Retirement Contribution Limits in 2026
• Federal Income Tax Brackets in 2026
• Tax Deduction Changes in 2026
• Estate and Gift Tax Changes
• Putting it All Together

Retirement Contribution Limits in 2026

Retirement accounts remain some of the most powerful tools for long-term financial planning, and many of their associated limits are increasing in 2026. Most employer-sponsored plans and individual retirement accounts—including 401(k)s, 403(b)s, 457 plans, SIMPLE IRAs, SEP IRAs, and traditional and Roth IRAs—see modest inflation adjustments that expand the amount you can save on a tax-advantaged basis.

For employer-sponsored plans like 401(k)s, the annual employee contribution limit rises to $24,500 in 2026, from $23,500 in 2025. This $1,000 increase may seem modest, but for individuals who consistently max their elective deferrals, the impact from additional savings can compound over time—especially when paired with employer matching and years of tax-deferred growth. The catch-up contribution limit for individuals age-50+ also increases to $8,000, from $7,500, bringing the total potential employee contribution to $32,500.

An enhanced catch-up opportunity continues for individuals ages 60–63. Under SECURE Act 2.0, these savers are eligible for a catch-up contribution of up to $11,250 in 2026. This brief window can offer a powerful way to accelerate retirement funding at a time when a person’s savings capacity tends to be higher.

Note however a new rule for 2026 on catch-up contributions for higher earners: if your wages exceeded $150,000 in the prior year, those catch-up contributions must be made as Roth (after-tax) contributions rather than on a pre-tax basis. While this shifts when you receive the tax benefit, it can add flexibility by building a more diversified mix of tax-advantaged assets for retirement.

IRA contribution limits see similar upward movement for 2026. Traditional and Roth IRA contributions increase to $7,500, from $7,000, and the $1,000 catch-up contribution for those age 50+ rises to $1,100.

Roth IRA eligibility thresholds also climb in 2026: single filers may be eligible to contribute fully with income up to $153,000 (up from $150,000), and joint filers up to $242,000 (up from $236,000). These are small but meaningful changes that widen planning flexibility for many households.

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Federal Income Tax Brackets in 2026

One of the most consequential developments heading into 2026 is what didn’t happen. A number of Tax Cuts and Jobs Act (TCJA) provisions were scheduled to expire, which would have narrowed federal income tax brackets and raised tax rates for many households. Instead, the OBBBA extended these provisions, preserving the current tax bracket structure.

Tax bracket thresholds themselves continue to rise with inflation in 2026, and the increases are most noticeable in the upper brackets—the income ranges where tax planning efforts often carry the greatest impact.

Here’s a look at how the top tax brackets shift from 2025 to 2026 for married couples filing jointly:

(Single filers see similar upward adjustments, though at lower income thresholds.)

These wider brackets give taxpayers more room to manage income without immediately pushing into a higher marginal tax rate. This can be especially valuable when we are planning around variable income sources such as bonuses, equity compensation, Roth conversions, or business distributions.

Tax Deduction Changes for 2026

The standard deduction also increases for 2026, rising to $32,200 for married couples filing jointly (up from $31,500), $16,100 for single filers (up from $15,750), and $24,150 for head of household filers (up from $23,400). But for older taxpayers, the more consequential update comes from the OBBBA, which introduced a new and unusually generous senior deduction beginning in 2025.

Under the OBBBA, each qualifying taxpayer age 65 or older is eligible for an additional $6,000 deduction from 2025 through 2028 ($12,000 for qualifying married couples). This deduction applies whether you itemize or claim the standard deduction, and it stacks on top of the existing senior standard deduction, which adds another $1,600 per spouse age 65 or older. Together, these provisions can be helpful for many older households.

The additional senior deduction does phase out for higher-income seniors. For married couples filing jointly, for example, the phase-out begins at $150,000 of modified adjusted gross income (MAGI) and ends at $250,000 of MAGI. Even so, for retirees and near-retirees with moderate income—especially those taking IRA withdrawals, receiving Social Security benefits, or earning part-time income—this temporary deduction can meaningfully reduce taxable income.

To illustrate the impact, consider a qualifying married couple, both age 67. In 2026, they could potentially combine three deductions: the standard deduction ($32,200), the existing senior standard deduction ($3,200 total), and the new OBBBA senior deduction ($12,000). Altogether, this could exceed $47,000 in deductions before considering any itemized expenses. Read more about the enhanced senior deduction under the OBBBA.

Another notable change is the increase to the state and local tax (SALT) deduction. After years of the $10,000 cap, the SALT deduction increases to $40,400 in 2026. However, for higher-income households, the allowable deduction begins to phase down at $505,000 of MAGI. Even with the phase-down, the increased deduction limit offers additional flexibility for many households, especially those with substantial property taxes or state income tax obligations. Read more about SALT changes under the OBBBA.

Other notable federal numbers are shifting upward as well. The Alternative Minimum Tax (AMT) exemption for joint filers rises to $140,200 from $133,300, while the foreign earned income exclusion (FEIE) increases to $132,900. And the Social Security taxable wage base climbs to $184,500 from $176,100, meaning a larger portion of wages will be subject to the 6.2% Social Security tax before the cap is reached.

Estate and Gift Tax Changes

The estate and gift tax exemption was one of the most watched developments during Congressional negotiations over the OBBBA. Before the bill, the federal lifetime exemption was set to fall dramatically on January 1, 2026, reverting to its previous mark of roughly $5 million. This potential “sunset” created understandable concern among many affluent families and their advisers.

Instead, the OBBBA established a new, higher baseline beginning in 2026, effectively extending and solidifying the elevated exemption that families have been planning around for the past several years.

In 2026, the federal lifetime exemption increases from $13.99 million per person to $15 million. For married couples, that means a combined $30 million can be transferred to another person tax-free during life or at death. Just as importantly, this higher exemption is now permanent under current law (subject only to future congressional changes), providing a clearer long-term runway for multi-generational planning. The annual gift tax exclusion remains unchanged at $19,000 per recipient.

For families considering lifetime gifting, trust funding, or multi-generational wealth strategies, this remains one of the most opportunistic environments in decades. If you want to read more about this topic, visit our new guide to gifting money (and more) to children and dependents.

Putting It All Together

The details of tax law can feel technical, but these changes really just mean more saving capacity, wider planning space, and a more stable policy environment.

For high-net-worth families, retirees, and business owners, these changes can offer both flexibility and clarity—two ingredients that help strengthen long-term planning.

At Cedar Point Capital Partners, our role is to help you use this information with intention. Whether that means maximizing tax-advantaged savings, planning a strategic Roth conversion, evaluating gifting opportunities, or considering reinvestment in your business, this year’s updates open meaningful pathways, and we can help you get there.

If you’d like to explore how these 2026 changes may affect your personal strategy, reach out and let’s start a conversation. Here’s to a prosperous 2026!

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