There's a reason working Americans are strongly encouraged to save well for retirement. Social Security's average retirement benefit is only a bit more than $2,000 a month.
You may be able to live on less money than what you're earning now once you retire. But would an annual income of roughly $24,000 a year cut it for you? Probably not.
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Plus, Social Security might have to cut benefits if lawmakers don't find a way to address the program's pending financial shortfall. If you think it'll be tough to get by on $24,000 a year in benefits, imagine getting even less.
It's for this reason that it's so important to fund a retirement account consistently. And while it's not a given that you'll have access to a 401(k) plan through work, anyone with earned income can contribute to an IRA.
In 2026, IRA contribution limits are rising, allowing savers to put even more money away for retirement in a tax-advantaged manner. Here's what you need to know.
What the new IRA contribution limits look like
Currently, IRA contributions max out at $7,000 for workers under 50 and $8,000 for workers ages 50 and older. In 2026, IRA contribution limits will rise to $7,500 for those under 50.
And for the first time in years, the limit for catch-up contributions is increasing, too. In 2026, savers 50 and older will get a $1,100 catch-up, bringing their total allowable contribution to $8,600.
And don't get tripped up by the name "catch-up contributions." You do not need to be "behind" on retirement savings to take advantage of the catch-up option. The only requirement is to be 50 or older. This means that if you turn 50 in December of 2026, you're allowed to contribute the higher amount to your IRA next year.
These limits apply to traditional IRAs, which are funded with pre-tax dollars, as well as Roth IRAs, which are funded with after-tax dollars. Roth IRAs offer the benefit of tax-free gains and withdrawals, and they don't force savers to take required minimum distributions.
Maxing out your IRA could do you a world of good
Because 401(k) plans have much higher contribution limits than IRAs, maxing out a 401(k) is pretty hard. Maxing out an IRA may be a lot more doable -- and it could do you a world of good.
Imagine 2026's IRA limits stay the same indefinitely, even though that's very unlikely. Also imagine you max out an IRA between ages 25 and 65 at the 2026 limits. If your portfolio gives you an 8% yearly return, which is a bit less than the stock market's historical average, you could end up with close to $2 million.
Here are some tips for boosting your IRA contributions:
- Sign up for an automatic transfer so money lands in your IRA every month.
- When you get a raise or bonus, put it into your IRA.
- Budget carefully so there's room to contribute to an IRA out of every paycheck.
- Join the gig economy for extra income so you're able to save steadily.
The fact that IRA contribution limits are rising in 2026 gives you more opportunity to save for retirement in a tax-advantaged fashion. And remember, if you're able to save beyond the 2026 contribution limits, and you don't have access to a 401(k) plan, you can always put money into a taxable brokerage account.
You won't be able to shield income from taxes by investing in a regular brokerage account. But combined with a maxed-out IRA, it could set the stage for a worry-free retirement you're able to enjoy to the fullest.
