For an age 60-63 catch-up, is 2026’s inflation adjusted amount $12,000 or $11,250?

For an age 60-63 catch-up, is 2026’s inflation adjusted amount $12,000 or $11,250?

On the day the Bureau of Labor Statistics released September’s Consumer Price Index measures:

John Feldt said $12,000. https://benefitslink.com/boards/topic/80106-2026-cola-projection-of-dollar-limits/#comment-354029

Mercer said $12,000. https://www.mercer.com/insights/law-and-policy/mercer-projects-2026-retirement-plan-limits/

But Milliman said $11,250. https://www.milliman.com/en/insight/2026-irs-limits-forecast-final-estimates

Can smart BenefitsLink people resolve which is correct?

Here’s the adjustment rule [I.R.C. § 414(v)(2)(E)(i)]:

(E) Adjusted dollar amount. For purposes of subparagraph (B), the adjusted dollar amount is —

(i) in the case of clause (i) of subparagraph (B), the greater of —

(I) $10,000, or [and]

(II) an amount equal to 150 percent of the dollar amount which would be in effect under such clause for 2024 for eligible participants not described in the parenthetical in such clause[.]

18 minutes ago, Peter Gulia said:

(II) an amount equal to 150 percent of the dollar amount which would be in effect under such clause for 2024 for eligible participants not described in the parenthetical in such clause[.]

$12,000 is what seems logical, but...

The plain language of 414(v)(2)(E)(i)(II) says 150% of the amount in effect for 2024, which would be $11,250.  

The Joint Committee on Taxation’s “bluebook” explanation of 2021-2022 Acts suggests JCT’s assumption that Congress intended the inflation-adjusted amount for a 60-63 participant is 150% of the inflation-adjusted amount for an age 50 participant.

See page 332 (the last two sentences of the “explanation of provision”) and footnote 1505. I attach a pdf of pages 331-332.

Joint Committee on Taxation, General Explanation of Tax Legislation Enacted in the 117th Congress [JCS–1–23] (Dec. 2023), available at https://www.jct.gov/publications/2023/jcs-1-23/.

The explanation cites no document or other source as support for an assumption Congress intended something other than the statute’s text.

A textualist interpreter might say Congress cannot have an intent other than the enacted text.

It’s unclear whether the IRS will indulge or refuse JCT’s assumption, or find another way to interpret the statute’s text.

JCT explanation of age 60-63 catch-up.pdf

Though the listed authorities usually come out with estimates prior to the IRS formal release and their estimates are usually on point, they all still state they are estimates.  Not sure when the IRS guidance will come out due to the government shutdown

I don't think anyone mentioned the bold text below?  414(v)(2)(C).  Doesn't that suggest COLA adjustments?

(C) Cost-of-living adjustment

(i) Certain large employers

In the case of a year beginning after December 31, 2006, the Secretary shall adjust annually the $5,000 amount in subparagraph (B)(i) and the $2,500 amount in subparagraph (B)(ii) for increases in the cost-of-living at the same time and in the same manner as adjustments under section 415(d); except that the base period taken into account shall be the calendar quarter beginning July 1, 2005, and any increase under this subparagraph which is not a multiple of $500 shall be rounded to the next lower multiple of $500. In the case of a year beginning after December 31, 2025, the Secretary shall adjust annually the adjusted dollar amounts applicable under clauses (i) and (ii) of subparagraph (E) for increases in the cost-of-living at the same time and in the same manner as adjustments under the preceding sentence; except that the base period taken into account shall be the calendar quarter beginning July 1, 2024.

Considering § 414(v)(2)’s subparagraphs (B), (C), and (E), there are multiple possible interpretations about how the several expressions interact or don’t.

https://www.taxnotes.com/research/federal/usc26/414?highlight=414

With three, four, or more possible reasonings, one could defend $11,250 or $12,000.

Many of us are reluctant to advise a client to use or communicate an amount other than the one the IRS eventually will publish.

If the current Antideficiency Act shutdown ends soon, we might get the IRS’s prepublication release before Thanksgiving Day.

Well this is how I see it:

(E) sets the beginning number alone. The beginning number alone is 150% of the 2024 catch-up limit.  After 2024, the reference to 2024 is moot.  Why? Because (C)(i) says the amount in paragraph (E) is adjusted for inflation.

I actually don't where the other view would come from?

Mercer projects 2026 retirement plan limits (updated) Mercer has changed its mind.

1 minute ago, Patty said:

Mercer projects 2026 retirement plan limits (updated) Mercer has changed its mind.

They must have read my post 🤣🤣🤣

On 11/11/2025 at 2:44 PM, austin3515 said:

I actually don't where the other view would come from?

IRS has confirmed it is staying at $11,250... 

I sure this doesn't end up being a scenario where we all send out our updates and they change their minds.  I forget what happened a few years ago with a change in the SSTWB that was a mess.  It's unlikely that Mercer and Milliman are not reading this correctly.

9 minutes ago, austin3515 said:

I sure this doesn't end up being a scenario where we all send out our updates and they change their minds.  I forget what happened a few years ago with a change in the SSTWB that was a mess.  It's unlikely that Mercer and Milliman are not reading this correctly.

Changes are unlikely.  We got the new limits late, there is really no time for changes.  The statute is unclear, so the IRS decision to keep it at $11,250 is a reasonable interpretation. 

More likely outcome is that clarification is sought over the next year so that we can have confidence in the COLA next year.

The IRS just said it will be $11,250 for the super de duper catchup. 

This is odd.  The same scenario applies to the enhanced limits for the catch-up contriubtions on SIMPLE IRA's with fewer than 25 people. They left it at $3,850 for those plans even though they increased it to $4,000 for plans that are not under 25 people.  That's ludicrous.  I can't believe this is not going to be addressed 😱

1 hour ago, John Feldt ERPA CPC QPA said:

super de duper

Special deluxe a la Peter T. Hooper.

Scrambled Eggs Super! https://seuss.fandom.com/wiki/Peter_T._Hooper

Sometimes we might regret that the IRS’s inflation-adjustment notices do not show the Consumer Price Index measures used, and do not show the arithmetic.

1 hour ago, austin3515 said:

This is odd.  The same scenario applies to the enhanced limits for the catch-up contriubtions on SIMPLE IRA's with fewer than 25 people. They left it at $3,850 for those plans even though they increased it to $4,000 for plans that are not under 25 people.  That's ludicrous.  I can't believe this is not going to be addressed

For this one, I actually think the IRS is correct. The COLA section does not reference an increase for these. The COLA section calls for increases in B(i) (regular catch-ups) B(ii) (SIMPLE Catch-ups), and Paragraph (E) (Super Catch-ups, which is why I think the IRS is wrong).  But there is no COLA provided for B(iii) which is the elevated SIMPLE IRA catch-up limit., That one is hardcoded to 110% of the 2024 limit. No COLA increase.  Obviously a technical correction would be needed on that.

Really puzzled on why  they thought there was no COLA for the super-catch-up though.