This is our final estimate of what the 2026 IRS Limits will be based on the U.S. Bureau of Labor Statistics (BLS) report published October 24, 2025.
With the publication of the September 2025 consumer price index (CPI), all 12 of this year’s monthly CPI rates are set. As the government shutdown continues, there may be a delay in the IRS publishing the final limits. This is our final estimate of the 2026 limits.
The federal fiscal year (FFY) ended September 30, 2025. Figure 1 depicts historical rolling 12-month changes in the CPI as of the end of each FFY through this year.
Figure 1: Historical 12-month percentage change each September 30, Consumer Price Index, all items, not seasonally adjusted
Source: U.S. Bureau of Labor Statistics.
The CPI as reported by the BLS for the 12 months ended September 30, 2025, was 3.0%, higher than the 2.4% annual change in the CPI as of September 30, 2024 (i.e., the close of the prior FFY). It is slightly higher than the 2.9% average annual change over the past 10 years ended September 30, 2024, and higher than the 2.6% average annual change over the past 20 years ended September 30, 2024.
Based on the reported CPI, we estimate the annual increase factor for the 2026 IRS limits to be about 2.9%. Our final predictions for the 2026 IRS limits are shown in Figure 2 below. There were no changes from our August forecast.
Please contact your Milliman consultant for details and questions about how these limits apply to your retirement plan(s).
Figure 2: 2026 IRS Limits Forecast using actual FFY 2025 CPI as of September 30, 2025
| Category of annual IRS limits | 2025 IRS limits | Estimated 2026 IRS limits |
Dollar increases from 2025 limits |
|---|---|---|---|
| Maximum annual annuity pension for DB plans | $280,000 | $290,000 | $10,000 |
| Maximum annual addition for DC plans | $70,000 | $72,000 | $2,000 |
| Maximum §401(k), §403(b), §457 deferral for DC plans | $23,500 | $24,500 | $1,000 |
| Catch-up contribution limit for DC plans* | $7,500 Ages 60 to 63: $11,250 |
$8,000 Ages 60 to 63: $11,250 |
$500 $0 |
| Compensation limit | $350,000 | $360,000 | $10,000 |
| Highly compensated employee (HCE) dollar amount | $160,000 | $160,000 | $0 |
| Key employee/officer compensation | $230,000 | $235,000 | $5,000 |
| Contribution limit to emergency savings accounts (ESAs) for DC plans | $2,500 | $2,600 | $100 |
| Prior year wage threshold triggering Roth catch-up contributions to DC plans | $145,000 | $150,000** | $5,000 |
* Under SECURE 2.0, plans are permitted (but not required) to increase the catch-up limit for participants ages 60, 61, 62, or 63.
** We assumed this threshold will be indexed for inflation during the two-year transition period ending December 31, 2025.
Source: U.S. Bureau of Labor Statistics. (n.d.) Consumer Price Index. Retrieved October 24, 2025, from https://www.bls.gov/cpi/.