In 2026, staying on top of retirement rules is more than just something to check off your list; it’s how you protect your hard-earned money. If you’ve been looking for a way to save beyond your employer’s plan, an Individual Retirement Account (IRA) is your best friend.
At 401GO, we’re all about making the complex simple. So, let’s break down what’s changing for 2026 and how you can make these savings accounts work for you.
The 2026 IRA
An IRA is a tax-advantaged account that lives independently of your employer. Anyone with an earned income can open an account and invest.
For 2026, the IRS has increased their contribution limits. You can now contribute:
- $7,500 if you are under age 50.
- $8,600 if you are age 50 or older
Traditional IRA: Tax Break Now
In a traditional IRA, you pay taxes on money taken out, not the money put in. This lowers your taxable income, meaning your contributions may be tax-deductible. Basically, you pay income tax on the money when you withdraw from your IRA account in retirement, not when investing.
Anyone can contribute to an IRA, but if you have a 401(k) at work, your ability to deduct that contribution on your taxes disappears at certain earning levels.
- Single: $81,000 – $91,000 modified adjusted gross income
- Married Filing Jointly: $129,000 – $149,000 modified adjusted gross income
Roth IRA: Tax-Free Later
In a Roth IRA, you contribute after-tax dollars. This allows your money to grow tax-free. When you retire, every penny taken out is yours to keep.
To fully invest in a Roth IRA, your Modified Adjusted Gross Income (MAGI) must be:
- If filing single: Less than $153,000 (Phase-out ends at $168,000).
- If married filing jointly: Less than $242,000 (Phase-out ends at $252,000).
Why Pair an IRA with Your 401(k)?
Pairing a 401(k) with an IRA gives you even more flexibility and control over your retirement. By using both, you can max out your savings potential while diversifying your taxes.
For example, if you’ve already hit your 401(k) limit ($24,500 in 2026), an IRA gives you another $7,500 of tax-advantaged saving. Additionally, having both “pre-tax” (Traditional) and “post-tax” (Roth) money gives you more options to manage your tax bracket once you stop working.
The “Roth Catch-Up” Rule
Starting in 2026, if you earned more than $150,000 in the previous year, SECURE 2.0 Act requires your 401(k) catch-up contributions to be made on a Roth basis. This doesn’t change your IRA, but it’s a huge shift in how you plan your tax strategy for the year.
Retirement shouldn’t be a guessing game. Whether you’re just starting out or you’re looking to maximize your final years in the workforce, choosing the right IRA can be a powerful move.
