Every January brings an annual ritual for the personal finance industrial complex: breathless coverage of new contribution limits and tax adjustments. Most of this noise gets ignored by people busy living out their financial lives. But buried in the bureaucratic updates are a few numbers that deserve attention, especially if you're serious about building wealth in 2026.
Here's what changed for 2026 and why it might actually matter.
Retirement account contribution limit increases
The IRS adjusts contribution limits annually for inflation, and 2026 brings modest increases across most tax-advantaged accounts:
401(k), 403(b), and 457 plans: $24,500 (up from $23,500)
IRA contributions (Traditional and Roth combined): $7,500 (up from $7,000)
HSA with individual coverage: $4,400 (up from $4,300)
HSA with family coverage: $8,750 (up from $8,550)
If you're 50 or older, catch-up contributions also increased:
401(k) catch-up: $8,000 (up from $7,500)
IRA catch-up: $1,100 (up from $1,000)
HSA catch-up (age 55+): $1,000 (unchanged)
Those ages 60-63 get a "super catch-up" of $11,250 for workplace retirement plans, which remains unchanged from 2025.
One important note on workplace plan catch-ups: many 401(k) plans require a separate election for catch-up contributions beyond the base $24,500 limit. You can't simply set your contribution to 27% of your $120,000 salary and expect to hit the $32,500 maximum. Instead, you might need to set your regular contribution at whatever percentage gets you to the $24,500 base, then make a separate catch-up election for the additional $8,000. Check with your plan administrator to understand how your specific plan handles this.
What this means in practice
A $1,000 increase in the 401(k) limit might not sound like much. But for someone earning $120,000 who's already maxing out their 401(k), this represents an extra $220 in federal tax savings (assuming a 22% marginal rate). Over 30 years at a 7% return, that additional $1,000 annual contribution becomes roughly $94,000.
The real opportunity sits with the IRA limit increase. For years, the $6,000 to $7,000 limit felt frustratingly low compared to workplace plans. The bump to $7,500 gives people more room to save, particularly those who don't have access to a 401(k) or who want to diversify their tax treatment between pre-tax and Roth accounts.
Consider a professional earning $85,000 with a modest 401(k) match. They might contribute 10% to their 401(k) ($8,500) plus max out a Roth IRA ($7,500). That's $16,000 in annual retirement savings, about 19% of gross income. Add the employer match, and they're well on track without living on rice and beans.
HSAs deserve more attention
Health Savings Accounts remain the most tax-advantaged retirement vehicle available, yet most people treat them as glorified checking accounts for medical bills. The contribution limits of $4,400 (individual) or $8,750 (family) might seem modest, but the triple tax advantage makes these dollars work harder than any other account.
Here's how it works for a 35-year-old couple with family coverage: contribute $8,750 pre-tax, let the funds stay in the account while keeping track of qualified expenses paid with regular saivngs, invest the funds in a low-cost stock index fund over the years, pay zero taxes on growth, and withdraw it in retirement tax-free for current and past qualified medical expenses. Since healthcare costs in retirement average $315,000 per couple according to Fidelity, having a dedicated tax-free account for these expenses makes sense.
The catch: you need a high-deductible health plan to contribute. But if that fits your situation, the HSA deserves priority in your savings hierarchy.
Gift tax changes most people won't use
The annual gift exclusion stayed flat at $19,000 per recipient. This means you can give $19,000 to as many people as you want without any tax consequences or reporting requirements. Married couples can combine their exclusions to gift $38,000 per recipient.
The bigger news: the lifetime estate and gift tax exemption jumped to $15 million per person ($30 million for married couples), up from $13.99 million. This permanent change eliminates federal estate tax concerns for the vast majority of families. Unless your net worth exceeds eight figures, estate tax planning belongs on the back burner for now.
A new charitable deduction for non-itemizers
Starting in 2026, taxpayers who take the standard deduction can still deduct up to $1,000 (single filers) or $2,000 (married filing jointly) in cash donations to qualified charities. This only applies to direct gifts to public charities, not donor-advised funds or private foundations.
This matters because roughly 87% of taxpayers take the standard deduction and previously received zero tax benefit for charitable giving. Now a couple making regular donations to their faith community, alma mater, or local food bank can reduce their taxable income by up to $2,000.
For someone in the 22% tax bracket, that's $440 in tax savings on donations they were making anyway. Not life-changing, but better than leaving money on the table.
What to do with this information
If you're already maxing out your 401(k), you may need to increase your contribution to capture the new limit. Most employers let you adjust your percentage or dollar amount anytime. If you contribute a flat dollar amount per paycheck, update it now to spread the full $24,500 across all paychecks (this helps ensure you’re not missing any matching dollars, plus helps with cash flow).
For IRAs, the January 1 deadline doesn't apply since you have until the tax filing deadline in April 2027 to make 2026 contributions. But automatic monthly contributions of $625 beat scrambling to find $7,500 next April.
If you're not sure how these changes fit into your overall financial picture or whether you're optimizing your savings across accounts, contact us for a conversation. We help people turn tax code updates into concrete action steps that actually move them toward their goals.