The 2026 Limits (IRS IR-2025-111 / Notice 2025-67)
The IRS raised most retirement contribution limits for 2026. Every dollar you contribute to a traditional account reduces your federal, NY State, and NYC taxable income — a triple discount that makes maxing out unusually valuable in New York.
| Account | 2026 Limit | Notes |
|---|---|---|
| 401(k) / 403(b) / 457(b) | $24,500 | Up from $23,500 |
| 401(k) catch-up (50-59) | +$8,000 | Total $32,500 |
| 401(k) catch-up (60-63, eligible plans) | +$11,250 | Total $35,750 |
| Total 401(k) incl. employer | $72,000 | $80,000 with catch-up |
| Traditional / Roth IRA | $7,500 | $8,600 if 50+ |
| HSA (self / family) | $4,400 / $8,750 | +$1,000 catch-up at 55+ |
| SEP-IRA | $72,000 | 25% of net earnings |
| SIMPLE IRA | $17,000 | +$4,000 catch-up |
The Triple Tax Discount in NY
A traditional 401(k) contribution avoids federal tax, NY State tax, and NYC tax (for city residents). For an NYC filer in the 22% federal / 5.9% state / 3.88% city brackets, each $1,000 contributed saves about $318 in current taxes. Maxing a 401(k) at $24,500 saves roughly $7,800 per year — before any employer match.
Roth IRA Phase-Outs (2026)
Roth IRA eligibility phases out at higher incomes for 2026:
| Filing Status | Phase-Out Range |
|---|---|
| Single / head of household | $165,000 – $175,000 |
| Married filing jointly | $242,000 – $252,000 |
If you are over the phase-out, the backdoor Roth IRA (contribute to a traditional IRA, then convert) remains available — see our high-income strategies guide.
The HSA Is the Best Deal in NY
An HSA is deductible at contribution (federal + NY + NYC), grows tax-free, and withdraws tax-free for qualified medical costs — the only triple-tax-advantaged account. For a family, the 2026 limit is $8,750 (+$1,000 at 55+). If you have a high-deductible health plan, max the HSA before the IRA.
NY-Specific Moves
Action Plan
The New York Subtraction the Federal Tables Leave Out
Every figure in the table above is federal. New York runs its own retirement write-off, and for a retiree it is worth as much as the contribution limits were worth during the working years:
| Situation | New York pension and annuity income exclusion |
|---|---|
| Age 59 and a half or older for the entire tax year | Up to $20,000 of qualifying pension and annuity income excluded from New York adjusted gross income |
| Turned 59 and a half during the tax year | Only the income received on or after that date, capped at $20,000 |
| Married, both spouses receiving pension income | $20,000 each, whether you file jointly or separately |
| Receiving your own pension and a deceased spouse's pension | Still a maximum of $20,000 each year |
| Several beneficiaries of a deceased taxpayer's pension | The $20,000 is allocated among the beneficiaries, and the combined exclusion cannot exceed $20,000 |
The exclusion applies to the New York calculation, not the federal one. A retiree with $60,000 of qualifying pension income pays New York tax on $40,000 of it, while the IRS still taxes the full amount. Contributions during the working years and this subtraction in retirement are two halves of the same New York strategy, and the second half is frequently left unclaimed.
Source: Information for retired persons, NYS Department of Taxation and Finance.
What a Contribution Is Worth in New York
A traditional contribution is taken out of your New York taxable income as well as your federal taxable income, and New York's marginal rates sit under the federal ones. The Department's published IT-201 rate schedule for single and married-filing-separately filers runs from 4% to 6.85% across the earned-income range:
| New York marginal rate, single | Taxable income band ends at | New York saving per thousand contributed |
|---|---|---|
| 4% | $8,500 | $40 |
| 4.5% | $11,700 | $45 |
| 5.25% | $13,900 | $52.50 |
| 5.5% | $80,650 | $55 |
| 6% | $215,400 | $60 |
| 6.85% | $1,077,550 | $68.50 |
The bands are the Department's published schedule; the saving column is that rate applied to a thousand dollars of contribution. New York City residents add the city resident rate on top and Yonkers residents add the surcharge, so the identical contribution is worth more the further south you file. That stacking is what makes the next section's ordering matter.
Source: Instructions for Form IT-201, tax rate schedule for filing status 1 and 3.
Where Each Dollar Goes
| Account | Deductible on the federal return | Deductible on the New York return | Taxed when you withdraw |
|---|---|---|---|
| Traditional 401(k) | Yes | Yes | Yes, as ordinary income |
| Roth 401(k) | No | No | No tax on qualified withdrawals |
| Traditional IRA | Yes, subject to income limits when a workplace plan also covers you | Yes | Yes, as ordinary income |
| Roth IRA | No | No | No tax on qualified withdrawals |
| Health savings account | Yes | Yes | No, for qualified medical costs |
The New York column tracks the federal column for all five accounts, which is exactly why a traditional contribution is worth more in New York City than in most of the country: federal, state and city income tax all drop in the year you contribute.
Order of Operations for a New York Saver
The 2026 limits above come from the IRS announcement of the 2026 retirement plan limits, and the New York figures come from the Department's published tables. Both were re-checked against the official pages for this update.