Updated for the 2026 tax year
Each year, the IRS reviews and adjusts retirement account contribution limits to account for inflation. Understanding these limits is critical for maximizing tax advantages while avoiding penalties or excess contributions. For the 2026 tax year, contribution limits for IRAs, SEP IRAs, and SIMPLE IRAs have increased.
If you are exploring alternative investments or want more control over your retirement strategy, it may also be helpful to understand how self-directed IRAs work and how different account types can be used together.
Traditional and Roth IRA Contribution Limits for 2026
For 2026, the IRS has increased the amount individuals can contribute to Traditional and Roth IRAs. These limits apply to your total combined IRA contributions, not per account.
- Under age 50: Up to $7,500
- Age 50 and older: Up to $8,600 (includes a $1,100 catch-up contribution)
You must have earned income, and you cannot contribute more than your taxable compensation for the year. Contributions for the 2026 tax year may be made until the federal tax filing deadline, generally April 15, 2027.
The IRS announced these updated IRA limits in its official release on 2026 retirement plan contribution limits.
Roth IRA Income Limits (MAGI) for 2026
Your ability to contribute directly to a Roth IRA depends on your Modified Adjusted Gross Income (MAGI) and filing status.
Single / Head of Household
- Full contribution: MAGI under $153,000
- Partial contribution: $153,000–$167,999
- Not eligible: $168,000 or more
Married Filing Jointly
- Full contribution: MAGI under $242,000
- Partial contribution: $242,000–$251,999
- Not eligible: $252,000 or more
Married Filing Separately
- Partial contribution: MAGI $0–$9,999
- Not eligible: $10,000 or more
If your income exceeds these limits, you may still be able to fund a Roth IRA indirectly using strategies that involve a Traditional IRA and conversion rules. To understand how Roth accounts fit into broader planning, see Self-Directed Roth IRA options.
Traditional IRA Deduction Limits for 2026
Anyone with earned income can contribute to a Traditional IRA. However, the tax deductibility of those contributions may be limited if you or your spouse participate in a workplace retirement plan.
- Single (covered by a workplace plan): Full deduction if MAGI is $81,000 or less; phase-out ends at $91,000
- Married Filing Jointly (contributing spouse covered): Full deduction if MAGI is $129,000 or less; phase-out ends at $149,000
- Married Filing Jointly (contributing spouse not covered, but other spouse is): Full deduction if MAGI is $242,000 or less; phase-out ends at $252,000
If neither spouse is covered by a workplace retirement plan, Traditional IRA contributions are generally fully deductible regardless of income.
SEP IRA Contribution Limits for 2026
A Simplified Employee Pension (SEP) IRA is an employer-funded retirement plan commonly used by small business owners and self-employed individuals.
For the 2026 tax year:
- Employers may contribute up to 25% of an employee’s compensation
- Contributions are capped at $72,000 per participant, whichever is less
This maximum is tied to the IRS’s annual defined contribution plan limit, published in IRS Notice 2025-67.
Key SEP IRA Rules
- Contributions are employer-only (employees cannot make salary deferrals)
- Employers must contribute the same percentage of compensation for all eligible employees
- SEP contributions are tax-deductible to the business
- SEP contributions do not count toward individual IRA contribution limits
For more detail on how these plans are structured, see SEP IRAs for small business owners.
SIMPLE IRA Contribution Limits for 2026
A Savings Incentive Match Plan for Employees (SIMPLE) IRA is designed for small businesses, typically those with fewer than 100 employees. SIMPLE IRAs allow both employee and employer contributions.
Employee Contribution Limits
- Under age 50: Up to $17,000
- Age 50 and older: Up to $20,500 (includes a $3,500 catch-up contribution)
Employer Contribution Requirements
Employers must choose one of the following:
- Dollar-for-dollar match of employee contributions up to 3% of compensation, or
- 2% nonelective contribution for all eligible employees, regardless of participation
SIMPLE IRA limits are separate from Traditional and Roth IRA limits, which can allow eligible individuals to layer retirement strategies.
Learn more about eligibility and setup on the SIMPLE IRA plan page.
Withdrawals, Penalties, and Exceptions
When You Can Withdraw Without Penalty
You may begin taking distributions from Traditional, SEP, and SIMPLE IRAs without the 10% early withdrawal penalty once you reach age 59½. Distributions are generally taxed as ordinary income.
Early Distribution Penalty Exceptions
The IRS allows several exceptions to the 10% early withdrawal penalty, including:
- Death or disability
- Qualified higher-education expenses
- Unreimbursed medical expenses exceeding 7.5% of AGI
- Health insurance premiums during certain periods of unemployment
- Qualified first-time home purchase (subject to lifetime limits)
- Substantially equal periodic payments (SEPPs)
Even when penalties are waived, income taxes may still apply.
Required Minimum Distributions (RMDs)
Under current law, including changes from the SECURE 2.0 Act, Required Minimum Distributions generally begin at age 73 for Traditional, SEP, and SIMPLE IRAs.
- Your first RMD may be delayed until April 1 of the year after you turn 73
- All future RMDs must be taken by December 31 each year
Failing to take the full RMD can result in a 25% penalty, reduced to 10% if corrected promptly.
How Accuplan Benefits Services Can Help
Navigating contribution limits across multiple retirement account types can be complex, especially for business owners and self-directed investors. Accuplan Benefits Services helps clients understand IRS rules, structure contributions efficiently, and stay compliant while pursuing long-term retirement goals.
Explore our self-directed IRA options and business retirement plans today. Questions about the 2026 contribution limits and how they might affect you? Contact us at 1-800-454-2649.
Our information shouldn’t be relied upon for investment advice but simply for information and educational purposes only. It is not intended to provide, nor should it be relied upon for accounting, legal, tax or investment advice.
