IRS Raises Contribution Limits for 2026
The Internal Revenue Service (IRS) has announced an increase in contribution limits for retirement savings plans, including the MO Deferred Comp Plan. With higher contribution limits, you have a better opportunity to set aside more money for the future—especially important if you’re planning to retire in the next few years. More savings now means more potential for retirement income later.
Key Highlights for the 2026 Contribution Limits
- The basic contribution limit for eligible 457(b) plans, like the MO Deferred Comp Plan, rose to $24,500, up from $23,500 for 2025.
- If you are age 50 or older, you can contribute an additional $8,000 in 2026, adding up to a total allowed annual contribution of $32,500.
- Under the SECURE 2.0 Act, employees ages 60 to 63 are eligible for a higher catch-up contribution limit. For 2026, this enhanced limit remains $11,250, rather than the standard $8,000 catch-up limit mentioned above.
- State employees within three years of normal retirement and who have not consistently maxed out their past annual contributions, may contribute up to $49,000 in 2026.
- Additional rules under the SECURE 2.0 Act affect how some catch-up contributions must be treated starting in 2026. More information will be available on modeferredcomp.org in the future.
Saver’s Credit Limits Also Increase in 2025
The income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers has also increased to $80,500 for married couples filing jointly, up from $79,000 for 2025; $60,375 for heads of household, up from $59,250; and $40,250 for singles and married individuals filing separately, up from $39,500.
The Saver’s Credit is designed to help low- and moderate-income workers save for retirement by providing a dollar-for-dollar reduction on their tax bill by the amount of the credit. If you qualify, the credit is based on your contributions to an eligible retirement savings plan, like deferred comp. You may be eligible for 50%, 20% or 10% of the maximum contribution amount, depending on your filing status and adjusted gross income (AGI).
Additional details can be found on the IRS website.
