2026 Retirement Contribution Updates for Airline Pilots
The IRS has announced the 2026 cost-of-living adjustments (COLA) that affect pension plan contribution limits. These annual adjustments ensure retirement benefits keep pace with inflation and apply to Social Security, qualified retirement plans, and pension benefits.
For pilots participating in employer-sponsored retirement plans, here are the key updates:
- Annual Contribution Limits: All standard contribution limits have been increased for 2026 to reflect COLA adjustments.
- Catch-Up Contributions: Under SECURE 2.0, pilots aged 60–63 can take advantage of a higher catch-up contribution limit of $11,250 (up from $8,000). This provides an opportunity to accelerate retirement savings during the final years of your career.
- Roth Requirement for High Earners: If your prior-year earnings exceed $145,000, all catch-up contributions for ages 50 and older must be made to a Roth account using after-tax dollars. This change may impact tax planning strategies for senior pilots.
These updates are designed to help you enhance retirement readiness while complying with new legislative requirements. If you have questions about how these changes affect your retirement plan or want to explore strategies for optimizing contributions, give us a call.
| IRAs | 2025 | 2026 |
| IRA Contribution Limit | $7,500 | $7,000 |
| IRA Catch-Up Contributions | $1,100 | $1,000 |
| Traditional IRA AGI Deduction Phase-Out Starting At | 2026 | 2025 |
| Joint Return | $129,000 | $126,000 |
| Single or Head of Household | $81,000 | $79,000 |
| SEP | 2026 | 2025 |
| SEP Minimum Compensation | $800 | $750 |
| SEP Maximum Contribution | $72,000 | $70,000 |
| SEP Maximum Compensation | $360,000 | $350,000 |
| SIMPLE Plans | 2026 | 2025 |
| SIMPLE Maximum Contributions | $17,000 | $16,500 |
| Catch-Up Contributions | $4,000* | $3,500 |
| 401(k), 403(b), Profit-Sharing Plans, etc. | 2026 | 2025 |
| Annual Compensation | $360,000 | $350,000 |
| Elective Deferrals | $24,500 | $23,500 |
| Catch-Up Contributions | $8,000** | $7,500 |
| Defined Contribution Limits | $72,000 | $70,000 |
| ESOP Limits | $1,455,000 $290,000 | $1,415,000 $280,000 |
| Other | 2026 | 2025 |
| HCE Threshold | $160,000 | $160,000 |
| Defined Benefit Limits | $290,000 | $280,000 |
| Key Employee | $235,000 | $230,000 |
| 457 Elective Deferrals | $24,500 | $23,500 |
| Control Employee (Board Member or Officer) | $145,000 | $140,000 |
| Control Employee (Compensation-Based) | $290,000 | $285,000 |
| Taxable Wage Base | $184,500 | $176,100 |
*Under a change made in SECURE 2.0, a higher catch-up contribution limit applies for employees aged 60, 61, 62 and 63 who participate in SIMPLE plans. For 2026, this higher catch-up contribution limit is $5,250.
**Under a change made in SECURE 2.0, a higher catch-up contribution limit applies for employees aged 60, 61, 62 and 63 who participate in these plans. For 2026, this higher catch-up contribution limit is $11,250 instead of $8.000. How-ever, if you earn more than $145,000 in the prior calendar year, all catch-up contributions for those ages 50 or older will need to be made to a Roth account in after-tax dollars.
Source: 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500 | Internal Revenue Service. (2025, No-vember 13). https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500
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Founded in 1967, Smith Anglin is a wealth management practice based in Dallas, Texas. As trusted financial stewards, we provide an elevated standard of care and manage over $1.9 billion in client assets* for a select group of pilots, families, individuals, and business owners in 48 states and abroad. With deep roots in accounting, tax planning and aviation retirement readiness, our mission is to conscientiously help secure the financial well-being of our clients over the course of their lives, working diligently to help them achieve their goals, dreams and financial security.
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