One positive by-product of inflation is being able to stock away a little more for your retirement. The IRS has announced an increase in the contribution limits for 401(k)s and IRAs in 2026. The limits are typically adjusted upward annually to allow for inflation, and this year brings an increase in $1,000 for 401(k)s and $500 for IRAs. The maximum annual contribution for 401(k)s will now be $24,500, and $7,500 for IRAs.
The increase in contribution limits coincides with a rise in the "magic number"--- the amount of savings an average person needs to retire comfortably. That's why this may be a good time to take advantage of the higher limit and up your retirement contributions. "What I like to say is set and forget," says Derrick Kinney, financial expert. "You want to increase the limit of your 401(k) and IRA, let the money come out of your pay before you've had the chance to decide, and then the money can work harder for you, even harder than you worked for it."
If you're over 50, you can save even more to your retirement in catch-up savings. The limit on 401(k) contributions is increasing by $8,000 for those over 50 next year. "It's like the IRS is saying we want less reliance on social security, so giving you the chance to save more will actually lighten the load on what it would cost the government down the road," says Kinney.
Whether or not you decide to increase contributions, Kinney believes you should take a fresh look at your retirement account at least once a year. "It's really important to keep a close eye on how much you're actually adding to things like your 401(k) and your IRA," he tells KTRH. "If you don't adjust it every year, you may be putting in less than what you could, which means your money is not working as hard for you as it should."
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