2026 MFS US retirement outlook
With so much information available, MFS Investment Management’s DC Pulse provides relevant quick takes on regulatory, legislative & market developments in the DC space. Explore the latest below.
MFS® Defined Contribution takes
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20th Anniversary of PPA: The retirement plan landscape has been transformed: traditional DB plans are rare, while DC plans are dominant. |
DC Key Investment Themes: 96% of all DC plans offer TDFs. What is the role of the core menu going forward? What innovation will we see in 2026? |
DC Key Regulatory, Legislative and Litigation Themes: Litigation increased in 2025; regulation is anticipated in 2026. Our survey data shows a lack of demand for private assets. |
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On the Minds of Plan Sponsors, Advisors and Participants: The changing regulatory and legislative landscape and inflation are top concerns. |
The Path Forward for Corporate DB Plans? Funded status improvements have implications for growth assets and fixed income duration. |
Actions to Consider in 2026 and Beyond: We can help you prepare for an eventful year. Learn more in our paper, 2026 MFS US Retirement Outlook. |
Defined Contributions regulatory and legislative happenings
IRS 2026 Contribution Limits
Retirement plan contribution limits, effective January 1, 2026, include:
401(k) Contributions:
- Increased to $24,500
- Catch-up for 50+: increased to $8,000
- Higher catch-up ages 60-63: $11,250 (unchanged)
IRA Contributions:
- Roth and Traditional: increased to $7,500
- Catch-up: Increased to $1,100
Health savings accounts (HSAs) contribution limits, effective January 1, 2026, include:
- Increased to $4,400 for an individual
- Increased to $8,750 per family
Trump accounts
Treasury and the IRS issued guidance on “Trump Accounts,” expected to go live on July 4, 2026. Trump Accounts are tax-deferred savings accounts for children under age 18. They generally function like a traditional IRA, but with special “growth period” rules. Accounts can only invest in certain mutual funds or ETFs that track an index of primarily US companies, and withdrawals from the accounts will be limited.
The initial federal pilot program will provide a $1,000 deposit for children born between 2025 and 2028. Michael and Susan Dell pledged $6.25 billion to support these accounts, providing an estimated $250 to 25 million children.
Contributions to these accounts are limited to $5,000 per year and will be indexed to inflation after 2027.
Proposed legislation
Several proposed pieces of retirement legislation emerged this quarter, including:
The ERISA Litigation Reform Act seeks to raise the pleading standards for certain allegations in ERISA litigation.
The Retirement Investment Choice Act would codify the August 2025 executive order focused on alternative and digital assets in DC plans.
The Incentivizing New Ventures and Economic Strength Through Capital Formation Act (INVEST Act) is a bill that packages more than 20 measures, including permitting 403(b) plans to invest in collective investment trusts (CITs). It passed the House with bipartisan support.
2026 social security benefits
The Social Security Administration announced an increase in benefits for Old-Age, Survivors, and Disability Insurance (OASDI) and Supplemental Security Income (SSI) of 2.8% for 2026.
The average Social Security benefit will increase by $56 per month.
The maximum amount of earnings subject to Social Security tax increases to $184,500 from $176,100.
Sources:
IRS: 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500
IRS: Rev. Proc. 2025-19
SSA: Social Security Announces 2.8 Percent Benefit Increase for 2026 | News | SSA
IRS: Notice of intent to issue regulations with respect to section 530A Trump accounts
PLANSPONSOR: IRS, Treasury Offer Updates on How Trump Accounts Will Work
U.S. Representative Randy Fine: Congressman Fine Introduces ERISA Litigation Reform Act to Strengthen Legal Standards and Protect Retirement Plans
Retirement Investment Choice Act
House Committee on Financial Services: INVEST Act
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