Understanding Retirement Plan Limits
Retirement plans are an important part of your financial security. Knowing the annual contribution limits helps you make the most of your benefits.
Each year, the IRS sets limits on how much you can contribute to plans such as 401(k), 403(b), and IRAs. These limits may change based on cost-of-living and IRS rules.
As part of your benefits at Iowa, these plans help you prepare for a secure future. This page provides the latest contribution limits, catch-up options/requirements, and key details to help you plan effectively.
2026 Contribution Limits at a Glance
| Retirement plan and/or Catch-up Option | 2026 Limit |
|---|---|
| Annual Compensation Limit - hired before Jan. 1, 1996 - This limit only applies to the mandatory & voluntary 403(b) accounts. | $466,666.67 |
| Annual Compensation Limit This limit applies to 401(a) and 403(b) mandatory and voluntary plans of employees hired after Jan. 1, 1996. | $360,000 |
| Elective Deferrals - 403(b) and 457(b) | $24,500 |
| Catch-up Contributions (Age 50+) | $8,000 |
| Super Catch-up Contributions (Age 60 - 63) | $11,250 (no change from 2025) |
| Defined Contribution Limits | $72,000 |
Prior Years Contribution Limits
| Retirement plan | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Annual Compensation Limit - hired before Jan. 1, 1996 - This limit only applies to the mandatory & voluntary 403(b) accounts. | $466,666.67 | $460,000 | $440,000 | $380,000 | $386,666.67 |
| Annual Compensation Limit This limit applies to 401(a) and 403(b) mandatory and voluntary plans of employees hired after Jan. 1, 1996. | $350,000 | $345,000 | $330,000 | $305,000 | $290,000 |
| Elective Deferrals - 403(b) and 457(b) | $23,500 | $23,000 | $22,500 | $20,500 | $19,500 |
| Catch-up Contributions (Age 50+) | $7,500 No change in 2025 | $7,500 No change in 2024 | $7,500 | $6,500 | $6,500 |
| Catch-up Contributions (Age 60 - 63) | $11,250 | N/A | N/A | N/A | N/A |
| Defined Contribution Limits | $70,000 | $69,000 | $66,000 | $61,000 | $58,000 |
Contribution Limits Explained
Annual Compensation Limits
The IRS sets an annual compensation limit that determines the maximum amount of salary that can be considered for retirement plan contributions. For 2026, this limit is $360,000.
- What this means: If your annual earnings exceed $360,000, contributions (both employee and employer) to mandatory and voluntary retirement plans will only be calculated on the first $360,000 of your eligible compensation.
- The limit applies to plans such as TIAA and IPERS, as well as voluntary options like VRSP 403(b) and 457(b).
- Wages above this ceiling are not subject to retirement plan contributions and will not be included in employer reporting.
Elective Deferrals
Elective deferrals are voluntary contributions you choose to make from your salary into retirement savings plans beyond mandatory contributions. These plans allow you to save on a pre-tax or Roth after-tax basis, giving you flexibility in how you prepare for retirement.
Defined Contribution Limits
For 2026, the IRS sets a combined contribution limit for all defined contribution plans under IRC Section 415(c):
- Total annual contributions (employee + employer) cannot exceed $72,000 or 100% of your eligible compensation, whichever is less.
- This includes:
- Mandatory contributions from you and the university.
- Any voluntary contributions you make to the 403(b) plan.
- Employer contributions to your TIAA account.
Catch-up Contribution Rules
Age 50+ catch-Up
Employees age 50 or older can contribute additional amounts to their voluntary 403(b) and 457(b) plans.
- IRS catch-up limit for 2026: $8,000
- Combined with the standard annual limit of $24,500, employees age 50+ may contribute up to $32,500 per plan.
Enhanced Catch-Up for Ages 60-63
Employees who are 60, 61, 62, or 63 by year-end qualify for a higher catch-up amount.
- Enhanced catch-up limit: $11,250
- Combined with the $24,500 annual limit, employees may contribute up to $34,750 per plan during these years.
Examples of Combined Totals
- Age 50+: $24,500 + $8,000 = $32,500
- Age 60-63: $24,500 + $11,250 = $34,750
Pre-Tax vs. Roth Options
When setting your catch-up contributions in Employee Self-Service, you can choose:
- Pre-Tax: Contributions reduce taxable income now; taxes are paid when the funds are withdrawn.
- Roth (After-Tax): Contributions are taxed now; withdrawals in retirement are tax-free (if IRS conditions are met).
Important Note: SECURE Act 2.0 Requirement
Beginning January 1, 2026, if you are a Highly Compensated Employee (HCE) - earning $145,000 or more in the prior year - any age 50+ catch-up contributions must be made as Roth (after-tax). Regular elective deferrals are not affected by this rule.
| Contribution Type | 2026 | 2025 | 2024 |
|---|---|---|---|
| VRSP 403(b) and 457(b) Annual Limit | $24,500 | $23,500 | $23,000 |
| Catch-Up (Age 50-59 and 64+) | $8,000 | $7,500 | $7,500 |
| Enhanced Catch-Up (Age 60-63) | $11,250 | $11,250 | N/A |