IRS Publication 590: IRA Rules for 2026

The IRA contribution limit for 2026 is $7,500, up from $7,000. The catch-up contribution for those 50 and older rises to $1,100 (its first increase ever, thanks to SECURE 2.0's new cost-of-living adjustment), making the total limit $8,600. This cap applies across all your Traditional and Roth IRAs combined.

You need earned income — wages, self-employment, or alimony under pre-2019 agreements — at least equal to your contribution. Investment income, rental income, and Social Security don't count.

The SECURE Act eliminated the age cap for Traditional IRA contributions. You can contribute at 75 if you're still earning. But the real planning question isn't can you contribute — it's where.

For 401(k) plans, the 2026 limit is $24,500 with an $8,000 catch-up (or $11,250 for ages 60–63 under SECURE 2.0's super catch-up). Between your 401(k) and IRA, a 62-year-old couple could shelter up to $88,800 in tax-advantaged accounts this year. Use our retirement calculator to model the compounding impact.

The limit stayed frozen at $2,000 from 1981 to 2001 — twenty years of pure erosion. Congress finally raised it to $3,000 in 2002 and indexed it to inflation in $500 increments. That indexing mechanism explains the $500 jump for 2026: CPI crossed the threshold to trigger the next increment.

The practical implication: a $7,500 IRA contribution carries far less retirement-building power than the $2,000 limit did in 1981 relative to home prices, healthcare costs, and college tuition. If you're relying on IRA contributions alone, you're bringing a knife to a gunfight. The 401(k) at $24,500, or the SEP IRA at $72,000 for the self-employed, are where the real sheltering happens.

Four IRA types, four different rules. Here's what matters for 2026:

The SEP IRA dominates for self-employed earners — $72,000 dwarfs the $7,500 Traditional/Roth cap. But SEP contributions count in the pro-rata calculation, which complicates backdoor Roth conversions. A solo 401(k) avoids this problem if you have no employees.

SIMPLE IRAs got a SECURE 2.0 boost: businesses with 25 or fewer employees can now offer enhanced limits of $18,100 in deferrals. The $4,000 catch-up (up from $3,500) plus mandatory employer matching of up to 3% makes SIMPLE IRAs competitive with stripped-down 401(k)s for very small firms.

One rule trips up nearly everyone: Traditional and Roth IRA limits are combined. You can split $7,500 between them however you like, but you cannot contribute $7,500 to each. SEP and SIMPLE limits are separate — a self-employed person with a SEP could contribute $72,000 to the SEP and $7,500 to a Roth IRA.

Traditional IRA deduction phase-outs (if covered by an employer plan):

• Single/Head of Household: $81,000–$91,000 MAGI
• Married Filing Jointly: $129,000–$149,000 MAGI
• MFJ, contributor NOT covered but spouse IS: $242,000–$252,000 MAGI

If neither you nor your spouse has an employer plan, your Traditional IRA contribution is fully deductible at any income.

Roth IRA eligibility phase-outs:

• Single/Head of Household: $153,000–$168,000 MAGI
• Married Filing Jointly: $242,000–$252,000 MAGI
• Married Filing Separately: $0–$10,000 MAGI

All ranges shifted upward for inflation (per IRS Notice 2025-67). A single filer earning $155,000 who was fully phased out of Roth eligibility in 2025 can now make a partial contribution.

The gap between the Roth MFJ phase-out ($242K) and the Traditional deduction phase-out ($149K) creates a dead zone: earn $150K–$241K as a couple, and you can contribute to a Roth but can't deduct a Traditional IRA. That makes the Roth the obvious choice in this income band. Above $252K, neither works directly — you need the backdoor strategy.

Three SECURE 2.0 provisions are now live in 2026:

Mandatory Roth catch-up for high earners. If your W-2 wages exceeded $150,000 in 2025, all catch-up contributions to your employer plan (401(k), 403(b), 457(b)) must go into a Roth account. No more pre-tax catch-up. This doesn't affect IRA catch-up contributions — those remain your choice — but it forces high earners to pay tax upfront on an additional $8,000 to $11,250 per year in employer plan contributions.

The silver lining: forced Roth contributions build a larger tax-free pool for retirement. A 55-year-old earning $200K pays roughly $2,640 more in current taxes (at the 24% bracket) on $11,000 of catch-up — but that money grows tax-free for decades.

Super catch-up for ages 60–63. The 401(k) catch-up jumps from $8,000 to $11,250 for participants turning 60, 61, 62, or 63 in 2026. At 64, you revert to the standard $8,000. This is a four-year window — use it or lose it.

Combined with the standard $24,500 deferral, a 61-year-old can shelter $35,750 in their 401(k) alone. Add an $8,600 IRA and spousal IRA, and a couple in this age band can defer over $88,000.

IRA catch-up now inflation-indexed. The $1,100 catch-up for 2026 is the first increase since the catch-up was created in 2002. Previously frozen at $1,000 for two decades, SECURE 2.0 added cost-of-living adjustments. The $100 increase is small, but it establishes a mechanism for future growth.

What SECURE 2.0 did NOT change for IRAs: there is no IRA super catch-up. The Roth mandate applies only to employer plans, not IRAs. And the $7,500 limit increase is a standard inflation adjustment, not a SECURE 2.0 provision.

SECURE 2.0 created a pathway to roll unused 529 college savings plan funds into a Roth IRA for the beneficiary. The rules are strict, but for families with leftover education money, this is a genuine tax-free conversion opportunity.

Requirements:

• The 529 account must have been open for at least 15 years
• Contributions made in the last 5 years (and their earnings) are ineligible
• Annual rollovers are subject to the Roth IRA contribution limit ($7,500 for 2026)
• Lifetime cap: $35,000 per beneficiary
• The beneficiary must have earned income equal to or greater than the rollover amount
• Must be a direct trustee-to-trustee transfer

The critical advantage: 529-to-Roth rollovers are not subject to income limits. A household earning $500,000 that can't contribute directly to a Roth IRA can still roll over 529 funds. That makes this a legitimate back door for high earners — one that doesn't trigger the pro-rata rule or require a non-deductible Traditional IRA contribution.

At $7,500 per year, it takes roughly 5 years to move the full $35,000 lifetime cap. Start now if you have a 529 that your child didn't fully use. The 15-year holding requirement means procrastinating costs real money — every year you wait is a year the clock doesn't start.

One planning trap: changing the 529 beneficiary resets the 15-year clock. If you switched the beneficiary to a younger sibling to avoid the penalty, you may have inadvertently delayed rollover eligibility.

The One Big Beautiful Bill Act, signed July 4, 2025, made the Tax Cuts and Jobs Act rates permanent. The 10%, 12%, 22%, 24%, 32%, 35%, and 37% brackets are now permanent law. That single change reshapes every Roth conversion calculation.

Before OBBBA, the standard advice was "convert now while rates are low, before the 2025 sunset raises them." That sunset is gone. So why does this make conversions more urgent, not less?

1. The Roth RMD study. OBBBA directed Treasury to study mandating RMDs for Roth IRAs. If Roth accounts eventually face required distributions, the entire premise of tax-free compounding until death changes. Converting now locks in today's rules.

2. The senior deduction window. OBBBA created a $6,000 deduction for taxpayers 65 and older — but only through 2028. That temporary deduction reduces the effective tax rate on conversions for anyone 65+ over the next two years.

3. The SALT expansion. The $10,000 SALT cap rose to $40,000 through 2029. In high-tax states (New York, California, New Jersey), the larger SALT deduction frees up taxable income headroom, letting you convert more while staying in the same bracket.

4. The tariff dip. This one's time-sensitive. Tariff-driven market volatility has dragged down IRA equity values in early 2026. Converting a Traditional IRA worth $500,000 today costs less in taxes than converting the same account at $600,000 six months from now. Market dips are conversion opportunities — you're buying tax-free growth at a discount.

A conversion ladder systematically moves Traditional IRA money into a Roth over several years, filling up low tax brackets without pushing into a higher one.

Profile: Sarah, age 63, just retired. $800,000 Traditional IRA. $32,000/year in Social Security starting at 67. No other income until RMDs at 73.

The window: Ages 63–72 — ten years of low income before RMDs force distributions.

Annual conversion target: Convert $55,000 per year, staying within the 12% bracket ($47,150 for single filers) after the $15,700 standard deduction plus $6,000 senior deduction.

Total taxable income: $55,000 − $15,700 − $6,000 = $33,300. Federal tax: ~$3,740.

After 10 years, Sarah has moved $550,000 to Roth at an average federal rate of ~6.8%. Her remaining $250,000 Traditional balance generates RMDs of roughly $9,434 at age 73 — comfortably manageable alongside Social Security.

Without the ladder, that $800,000 generates age-73 RMDs of $30,189 — enough to push combined income (with Social Security) into the 22% bracket and trigger Social Security benefit taxation.

Sarah paid ~$37,400 in total conversion taxes over a decade. Without converting, she'd pay substantially more in lifetime taxes on RMDs, plus her heirs face the 10-year inherited IRA rule at their peak earning rates.

With the Fed funds rate at 3.64% and the 10-year Treasury yielding 4.29%, the opportunity cost of paying conversion taxes today is modest compared to decades of tax-free compounding. And if Sarah's Traditional IRA has dropped 10-15% from tariff volatility, her conversion tax bill drops proportionally — converting $700,000 instead of $800,000 saves roughly $6,800 in year-one taxes alone.

Under SECURE 2.0, Required Minimum Distributions from Traditional IRAs begin at age 73. Starting in 2033, this threshold increases to 75. Roth IRAs have no RMDs during the owner's lifetime.

Your RMD equals your December 31 prior-year IRA balance divided by the IRS Uniform Lifetime Table factor:

Missing an RMD triggers a 25% excise tax on the undistributed amount (reduced from 50% by SECURE 2.0). Correct it within two years and the penalty drops to 10%.

The decade between retirement and age 73 is the Roth conversion sweet spot. Your income drops (no salary), you haven't started Social Security or RMDs, and your tax bracket is at its lifetime low.

Notice how RMDs accelerate: a $1M Traditional IRA forces $37,736 out at 73 but $111,111 at 95. Combined with Social Security, that's enough to push a retiree into the 24% or 32% bracket — exactly the outcome a conversion ladder prevents. With CPI running at 3.3%, that tax bracket creep compounds every year you delay.

The pro-rata rule is the most expensive mistake in IRA planning. When you convert a Traditional IRA to a Roth, the IRS treats all your Traditional IRA balances as a single pool. You cannot cherry-pick which dollars to convert.

Example: You have $90,000 in deductible contributions and $10,000 in non-deductible contributions across all Traditional IRAs. You convert $10,000, thinking it's the non-deductible portion. The IRS says 90% of your conversion is taxable — $9,000 — regardless of which account you convert from.

This kills the backdoor Roth strategy for anyone with existing pre-tax IRA balances. The workaround: roll your deductible Traditional IRA balances into your employer's 401(k) plan (if it accepts incoming rollovers). That removes them from the pro-rata calculation, leaving only the non-deductible balance for a clean backdoor conversion.

SEP IRAs and SIMPLE IRAs count in the pro-rata calculation too. If you're self-employed with a SEP IRA, the backdoor Roth becomes much harder. A solo 401(k) may be the better vehicle — it accepts rollovers and keeps your IRA balance at zero.

Alternative for high earners: the new 529-to-Roth rollover sidesteps the pro-rata rule entirely. If you have unused 529 plan funds meeting the 15-year holding requirement, that $7,500 annual rollover goes straight to Roth regardless of your existing IRA balances.

The SECURE Act replaced the stretch IRA with a 10-year distribution requirement for most non-spouse beneficiaries. If you inherit a Traditional IRA from someone who died after 2019, you must empty the entire account by December 31 of the 10th year following the owner's death.

Spouse beneficiaries can still roll the inherited IRA into their own and delay distributions until their own RMD age. Minor children get the stretch until age 21, then the 10-year clock starts. Disabled and chronically ill beneficiaries are exempt.

The planning implication: if you're leaving a large Traditional IRA to non-spouse heirs, they'll face a compressed tax hit. Converting to Roth during your lifetime — especially during the low-income years between retirement and age 73 — shifts that tax burden from your heirs' peak earning years to your lower-rate years.

A $500,000 inherited Traditional IRA forces roughly $50,000/year in taxable distributions over the 10-year window. For an heir in the 32% bracket, that's $16,000/year in federal tax — $160,000 total. Had the original owner converted at the 12% bracket via a ladder, the total tax would have been $60,000. The $100,000 difference is the cost of not planning.

With tariff uncertainty threatening sustained market volatility, the case for converting during depressed account values is even stronger. Your heirs inherit the Roth at full market-recovery value, tax-free.