SIMPLE-IRA Catch-Up Contributions in 2026

A Strategic Retirement Tool for Business Owners, Creators & Medical Professionals

If you are age 50 or older and participating in a SIMPLE-IRA, 2026 presents a powerful opportunity to increase your retirement savings — while reducing your taxable income.

At Velin & Associates, Inc., CPA Los Angeles, we work with:

• Doctors and medical practice owners

• Dentists and dental business owners

• YouTubers and TikTok creators

• Shopify and Amazon sellers

• Consultants and self-employed professionals

• High net worth individuals

Many of our clients are focused on tax efficiency today — but retirement planning is equally important. SIMPLE-IRA catch-up contributions allow you to do both.

Let’s break down how this works and when it makes strategic sense.

2026 SIMPLE-IRA Contribution Basics

For 2026, the standard elective deferral limit is:

Up to $17,000, or
100% of your compensation (whichever is less).

This applies to:

• Employees participating in a SIMPLE-IRA plan

• Self-employed individuals

• Owner-employees of S-corps or C-corps

In addition to your elective deferral, the employer (including your own business) must contribute either:

• A 3% matching contribution, or

• A 2% nonelective contribution (if chosen by the employer)

This structure makes SIMPLE-IRAs attractive for small businesses and professional practices.

Catch-Up Contributions for Age 50+

If you are age 50 or older by December 31, 2026, you may contribute:

Standard Catch-Up: $4,000

That means your total elective deferral becomes:

$21,000 ($17,000 + $4,000)

These catch-up contributions are:

• Tax-deductible

• Reduce current taxable income

• Grow tax-deferred

For many high-earning professionals in Los Angeles, this is a straightforward way to lower federal and California taxable income.

Special “Super” Catch-Up for Ages 60–63

A key update for 2026:

If you turn 60, 61, 62, or 63 in 2026, you qualify for a higher catch-up amount:

$5,250 Super Catch-Up

Your total maximum becomes:

$22,250 ($17,000 + $5,250)

This higher limit only applies if you reach one of those specific ages in 2026.

If you are 64 or older, you return to the standard $4,000 catch-up limit.

Higher Limits for Small Employers (25 or Fewer Employees)

There is a special rule for smaller companies.

If you work for an employer with 25 or fewer employees, or if a company with 26–100 employees elects enhanced contributions, the 2026 limits increase.

Under this special rule:

• Base deferral limit increases to $18,100

• Catch-up (50–59 or 64+) becomes $3,850

• Super catch-up (60–63) remains $5,250

Example:

A 61-year-old dentist working in her own small practice could contribute:

$23,350 ($18,100 + $5,250)

That is a meaningful increase in tax-deferred savings.

Examples:

Example 1 – Self-Employed Creator (Age 52)

A YouTuber in Los Angeles earns $120,000 in net self-employment income in 2026.

He contributes:

• $17,000 elective deferral

• $4,000 catch-up

• $3,600 employer match (3%)

Total retirement contribution: $24,600

His taxable income is reduced significantly — while increasing long-term savings.

Example 2 – Dental Practice Owner (Age 61)

A dentist earning $300,000 through her S-Corp in 2026 contributes:

• $17,000 elective deferral

• $5,250 super catch-up

• $9,000 employer match

Total: $31,250 into retirement

That $22,250 elective contribution reduces current taxable income — extremely valuable in higher tax brackets.

Example 3 – Sole Proprietor with $30,000 Income

If a sole proprietor earns $30,000:

• $17,000 elective deferral

• $900 employer match (3%)

Total deductible contribution: $17,900

By comparison, a SEP-IRA would allow only about $6,000 (20% of income).

For moderate-income business owners, SIMPLE-IRAs can be surprisingly powerful.

Long-Term Impact of Catch-Up Contributions

Let’s say you contribute an extra $4,000 annually from age 50 to 65.

Assuming 5% annual growth:

Your additional savings could approach $100,000 by retirement.

With super catch-up contributions and employer matches, the numbers grow even further.

Can You Also Contribute to a Traditional or Roth IRA?

Yes — but with limitations.

Because a SIMPLE-IRA is considered an employer-sponsored plan:

• Deductibility of Traditional IRA contributions may phase out based on income.

• Roth IRA eligibility depends on separate income thresholds.

Strategic coordination is essential.

For high-income doctors, dentists, and creators, Roth strategies may require additional planning.

Why SIMPLE-IRAs Work Well for Small Businesses

SIMPLE-IRAs are often ideal for:

• Medical practices

• Dental practices

• Boutique agencies

• Creative studios

• E-commerce operations

• One-employee corporations

They are easier and less expensive to administer than many 401(k) plans.

They allow meaningful deferrals without complex compliance requirements.

For business owners in Los Angeles who want:

• Predictable contribution rules

• Tax deductions

• Simplicity

• No heavy administrative costs

A SIMPLE-IRA may be the right fit.

When Catch-Up Contributions Make Strategic Sense

Catch-up contributions are especially valuable if:

• You are behind on retirement savings

• You are in a high tax bracket

• You have strong cash flow

• You want to reduce 2026 taxable income

• You are in the 60–63 super catch-up window

For many of our CPA Los Angeles clients, retirement planning is integrated with:

• Tax minimization strategies

• S-Corp compensation planning

• Practice buy-sell planning

• Exit planning

• High net worth tax strategy

Final Thoughts

SIMPLE-IRA catch-up contributions are not just a retirement feature — they are a tax strategy.

For creators, doctors, dentists, Amazon sellers, and small business owners in Los Angeles, 2026 presents enhanced opportunities — especially for those ages 60–63.

If you have the cash flow, the catch-up rules can:

• Lower current tax liability

• Increase retirement savings

• Improve long-term financial security

Strategic implementation matters. Contribution timing, employer structure, and income planning should all be coordinated. For more information about our tax planning services, contact us today: visit our website.

Velin & Associates, Inc

8159 Santa Monica Blvd STE 198/200 West Hollywood, CA 90046
323-902-1000
dmitriy@losangelescpa.org

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