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5 IRS Changes for 2026 That Will Impact Your Retirement Accounts

Higher contribution limits, updated tax rules, and benefit increases could reshape how retirees and savers plan for 2026.

By Adam Palasciano

Edited by Amanda Machado

Updated Jan. 10, 2026

Each year, IRS updates reshape retirement savings for seniors. For 2026, several of those changes affect how much you can contribute, how benefits are paid, and how retirement income is taxed.

Understanding these updates can help retirees and near-retirees better manage cash flow and build wealth over time. Even modest adjustments can mean significant compounding over time.

Here are the key IRS changes to know as 2026 approaches.

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Contribution limits for 401(k)s and similar retirement accounts are increasing

The IRS raised employee contribution limits for 401(k)s, 403(b)s, governmental 457 plans, and the federal Thrift Savings Plan to $24,500 for 2026, up from $23,500 in 2025. Workers age 50 and older can make catch-up contributions of $8,000, up from $7,500 in 2025, bringing their total annual contribution limit to $32,500.

In addition, participants ages 60 through 63 may qualify for an even higher catch-up limit of $11,250 instead of $8,000, under SECURE 2.0 rules. These higher limits can help older workers accelerate savings in the final years before retirement.

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Maximum contributions for IRAs will also increase

IRA contribution limits rise to $7,500 for 2026, compared with $7,000 in 2025. The catch-up contribution for individuals age 50 and older increases to $1,100, up from $1,000 in 2025.

This adjustment reflects inflation indexing introduced under SECURE 2.0 rules. While IRAs have lower limits than workplace plans, the increase still expands tax-advantaged saving opportunities for retirees and late-career workers.

New paper statement requirements

Starting in 2026, defined contribution (DC) retirement plans must provide participants with at least one paper statement per year unless electronic delivery is explicitly chosen. Meanwhile, defined benefit (DB) plans must issue paper statements at least once every three years.

The rule aims to ensure participants receive clear, accessible information about their retirement balances. For retirees, paper statements may improve oversight and reduce the risk of missed account changes.

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SS COLA will increase benefits

Social Security and Supplemental Security Income benefits will rise by 2.8% in 2026 thanks to the annual cost-of-living adjustment (COLA). This change means increased monthly payments for roughly 71 million Social Security recipients and 7.5 million SSI recipients next year.

Increased benefits can modestly improve retirement income. However, they may also increase taxable income for some households, which can make retirement account withdrawals and tax planning very important.

The standard deduction is going up

For tax year 2026, the standard deduction increases to $32,200 for married couples filing jointly and surviving spouses, up from $31,500 in 2025. Single filers and those married filing separately will see the deduction rise to $16,100, up from $15,750 in 2025, while heads of household receive a $24,150 deduction, up from $23,625 in 2025.

A higher standard deduction could reduce taxable retirement income for filers who do not itemize. This change may also affect how retirees sequence withdrawals from taxable, tax-deferred, and Roth accounts.

Why these changes matter for retirement planning

These IRS and SSA updates can influence how much retirees can save, withdraw, and keep after taxes. Higher contribution limits favor late-career savers, while benefit increases and deductions affect cash flow during retirement.

Administrative changes, such as paper statements, may play a role in account visibility and oversight. Coordinating these updates within a broader strategy can help avoid unintended tax consequences.

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How these updates could influence withdrawal timing

IRS adjustments in 2026 may subtly affect when retirees choose to withdraw from different types of accounts, and changes to contribution limits may shift taxable income from year to year.

Reviewing withdrawal timing across taxable, tax-deferred, and Roth accounts can help maintain flexibility. Even small adjustments may reduce tax drag over a long retirement horizon.

Bottom line

The IRS changes taking effect in 2026 touch nearly every stage of retirement — from final contribution years to benefit collection and tax reporting. Higher limits, updated deductions, and benefit adjustments can subtly shift how retirement income is taxed and managed.

Understanding how these rules work together can help retirees align withdrawals, savings, and timing decisions more effectively within a long-term retirement plan.

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