The IRS has increased the amount employees can contribute to their retirement savings accounts for 2026. Additionally, a new federal rule will change how some employees make catch-up contributions beginning Jan. 1.

Here’s what’s changing and how it could impact your IU retirement savings.

Increased contribution limits for 2026

The IRS updated contribution limits for 2026, meaning employees can contribute more to IU’s supplemental retirement plans — the IU TDA and IU 457(b) — starting Jan. 1:

• Employee contributions: $24,500 to each plan (up from $23,500 in 2025).
• Catch-up contribution (age 50+): An additional $8,000 to each plan (up from $7,500 in 2025), which increases to $11,250 at ages 60 to 63.

Eligible employees can contribute up to the IRS limit in both plans each year. For most, contributions can be pre-tax, after-tax (Roth) or a combination of both. Changes to the amount or type of contributions can be made at any time during the year by submitting an optional benefit change request through the Employee Center.

New rule for catch-up contributions

A new rule under the federal SECURE 2.0 Act is changing how some employees must make catch-up contributions in 2026.

Employees who will be age 50 or older in 2026 and who make more than $150,000 in FICA wages in 2025 (Box 3 on your W-2) will be required to make all catch-up contributions as Roth (after-tax) in 2026.

Employees who do not meet both criteria can choose to make catch-up contributions as pre-tax, after-tax or a combination of both.

Only a small number of employees are affected by this new requirement. Those individuals will receive direct communications from IU Human Resources and Fidelity in the coming months with additional details.

Participants are responsible for staying within the IRS contribution limits. Employees who have questions are encouraged to meet with one of IU’s dedicated Fidelity Workplace Financial Consultants who can provide one-on-one guidance on contribution strategies or investment options. Call 800-642-7131 or use the online scheduling tool to make an appointment.

For questions about the IU plans, contact IU Human Resources at askHR@iu.edu or 812-856-1234.