4. You Can Take Advantage of New Contribution Limits Immediately
By January, the IRS typically updates the retirement contribution limits for IRAs and 401(k)s. This means:
- You can start contributing at the new limits in January.
- You can update your payroll contributions to match these limits.
- If you’re 50 or order you can take advantage of catch-up contributions
Here’s a quick overview of the 2025 and 2026 limits:
Traditional and Roth IRA Contribution Limits
| Category |
2025 |
2026 |
| Standard contribution limit |
$7,000 |
$7,500 (+$500 from 2025) |
| Catch-up contribution (age 50 or older) |
$1,000 |
$1,100 (+$100 from 2025) |
| Total if you're 50 or older |
$8,000 |
$8,600 (+$600 from 2025) |
| Contribution deadline |
April 15, 2026 |
April 15, 2027 |
SEP IRA Contribution Limits
| Category |
2025 |
2026 |
| Contribution limit (25% of compensation, up to the annual maximum) |
$70,000 |
$72,000 (+$2,000 from 2025) |
| Contribution deadline |
April 15, 2026 |
April 15, 2027 |
401(k) Contribution Limits
| Category |
2025 |
2026 |
| Standard contribution limit |
$23,500 |
$24,000 (+$500 from 2025) |
| Catch-up contribution (age 50 or older) |
$7,500 |
$8,000 (+$500 from 2025) |
| Total if you're 50 or older |
$31,000 |
$32,000 (+$1,000 from 2025) |
| Contribution deadline |
December 31, 2026 |
December 31, 2027 |
The 2026 limits are slightly higher than the 2025 limits, giving you extra room to save. Reviewing and adjusting your contributions in January can help you take full advantage of that opportunity.
5. Start the Year by Organizing Your Accounts
The start of the year is a natural time to clean up, consolidate, and organize your financial life. If you’ve been thinking about:
- Consolidating old 401(k)s and IRAs
- Checking your investment mix
- Updating your beneficiaries
Tackling these tasks early can make things feel more manageable. Pairing a rollover with your first contribution of the year can also give your finances a fresh start.
Ready to Simplify Retirement in 2026
Making retirement contributions in January doesn’t require big money or a perfect plan. It just requires early action that sets the tone for your entire year. The start of the year can be an ideal time to get your retirement plan on track.
One way to help bring clarity, momentum, and a head start to your retirement planning is by rolling over old accounts. At PensionBee, you can receive a 1% match whenever you roll over or make contributions to a PensionBee IRA (terms and conditions apply). Many rollovers happen automatically, but if yours needs extra attention, our personal rollover managers, called BeeKeepers, are here to help every step of the way. You’ll get expert management and diversified portfolios with ETFs like SPY and MDY from State Street Investment Management, one of the world’s largest asset managers.
Frequently Asked Questions (FAQs)
1. What are the key benefits of making early retirement contributions in the new year?
Early contributions can help you build consistency from day one, avoid the stress of rushing contributions at the end of the year, spread your contributions across 12 months, and comfortably reach the annual contribution limits.
2. What are the 2025 annual contribution limits for a 401(k) and IRA?
401(k) Contribution Limits
In 2025, you can contribute up to $23,500 to a 401(k) if you’re under 50, and $31,000 if you’re 50 or older (including the $7,500 catch-up contribution). In 2026, the limits increase to $24,500 for those under 50, and $32,500 for those 50 or older (including the $8,000 catch-up contribution).
IRA Contribution Limits
In 2025, you can contribute up to $7,000 annually to a Traditional or Roth IRA, or $8,000 if you’re 50 or older (including the $1,000 catch-up contribution). In 2026, the limits increase to $7,500 annually, or $8,600 if you’re 50 or older (including the $1,100 catch-up contribution).
Starting contributions in January lets you take advantage of the new limits right away.
3. At what point do I qualify to make catch-up contributions?
The moment you turn 50 (or will be 50 by year-end), you’re allowed to start making catch-up contributions. These can be added to IRAs and workplace plans beginning in January.
4. How does rolling over an old 401(k) affect my retirement plan?
Consolidating old retirement accounts like 401(k)s and IRAs can help simplify the management of your finances and gives you a clearer, more organized picture of your overall retirement strategy. The start of the year is an ideal time to complete this task.
5. Is it better to make a single large contribution in January or spread it out monthly?
While a single January contribution gets money in the market immediately, spreading contributions across the year can make saving more manageable for your budget, help you stay consistent, and reduce the impact of market fluctuations.
