BDO presents a highlights summary of the significant cost-of-living adjustments (COLA) effective for 2026. These adjustments recently announced by the Internal Revenue Service (IRS) and the Social Security Administration (SSA) have a wide-ranging impact, including the savings rate for retirement plans. BDO will continue to provide updates on regulatory matters impacting retirement plans in the coming year – to sign up for BDO newsletters and other insights, visit the ERISA Center of Excellence.
Code Section | 2026 | 2025 | 2024 |
401(a)(17) /404(l) Annual Compensation | $360,000 | 350,000 | 345,000 |
402(g)(1) Elective Deferrals | $24,500 | 23,500 | 23,000 |
408(k)(2)(C) SEP Minimum Compensation | $800 | 750 | 750 |
408(k)(3)(C) SEP Maximum Compensation | $360,000 | 350,000 | 345,000 |
408(p)(2)(E) SIMPLE Maximum Contributions | $17,000 | 16,500 | 16,000 |
409(o)(1)(C)(ii) ESOP Limits | $1,455,000 | 1,415,000 | 1,380,000 |
$290,000 | 280,000 | 275,000 | |
414(q)(1)(B) HCE Threshold | $160,000 | 160,000 | 155,000 |
414(v)(2)(B)(i) Catch-up Contributions | $8,000 | 7,500 | 7,500 |
414(v)(2)(B)(ii) Catch-up Contributions | $4,000 | 3,500 | 3,500 |
| 414(v)(2)(B)(iii) SIMPLE IRAs under 408(p) Age 50+ Catch-up Contributions | $3,850 | 3,850 | |
| 414(v)(2)(E)(i) Super Catch-up Contributions Regular Age 60-63 Super Catch-up Contributions | $11,250 | 11,250 | 7,500 |
| 414(v)(2)(E)(ii) Catch-up Contributions SIMPLE Plans and IRAs Age 60-63 Super Catch-up Contributions | $5,250 | 5,250 | |
| 414(v)(7)(A) Roth Catch-up Wage Threshold | $150,000 | 150,000 | 145,000 |
415(b)(1)(A) DB Limits | $290,000 | 280,000 | 275,000 |
415(c)(1)(A) DC Limits | $72,000 | 70,000 | 69,000 |
416(i)(1)(A)(i) Key Employee | $235,000 | 230,000 | 220,000 |
BDO works collaboratively with clients to test retirement plan limits while performing an audit of the qualified retirement plan. For more information about our ERISA audit services, plan administration and actuarial services, visit BDO’s Employee Benefit Plan Audits.