Key Takeaways

• Retirement contribution limits are increasing in 2026, including higher 401(k), IRA, and catch-up contribution amounts, creating new tax-saving opportunities for dental practice owners and employees.
• High earners must make catch-up contributions as Roth (after-tax) starting in 2026, requiring some practices to update or amend their retirement plans.
• Stronger retirement benefits can significantly improve recruiting and retention, especially for hygienists, assistants, and associate dentists in a competitive labor market.
• Higher limits help practice owners accelerate long-term savings, especially those who delayed retirement funding while paying off student loans or investing in practice growth.
• Dental practices should review their plan design, tax strategy, and communication approach now to ensure compliance, maximize contributions, and take full advantage of 2026 planning opportunities.

Running a dental practice means constantly juggling clinical care, business demands, and long-term planning. One area where smart planning can make a major difference is retirement savings. The IRS recently released its annual cost-of-living adjustments for 2026, and several key contribution limits are increasing. For practice owners and managers, this means new opportunities to lower taxes, strengthen employee benefits, and build long-term financial security.

These changes also matter if your practice offers a 401(k) or SIMPLE retirement plan, since contribution limits directly affect everything from recruiting and retention to employer match strategies.

What’s Changing in 2026?

Here are the major updates to retirement plan limits beginning January 1, 2026:

• 401(k), 403(b), and most 457(b) elective deferrals: Increasing to $24,500 (from $23,500)
• Catch-up contributions for age 50+: Rising to $8,000
• Traditional & Roth IRA contributions: Increasing to $7,500, with a $1,100 catch-up for age 50+
• Total employer + employee contribution limit for defined-contribution plans: Increasing to $72,000
• Mandatory Roth catch-up requirement: Starting in 2026, if an employee earned over $145,000 in the prior year, any catch-up contributions must be Roth (after-tax), assuming the plan allows it.

These adjustments are based on inflation formulas built into federal law.

Why This Matters for Dental Practice Owners

Dental professionals often carry uniquely high debt, operate on variable cash flow, and rely heavily on employer-sponsored retirement strategies. Increasing contribution limits give owners several advantages:

1. More Opportunity to Reduce Taxes: Higher limits mean you can defer more income or shift more into Roth buckets when appropriate. For high-earning practice owners, this is a powerful year-end tax-planning tool.

• Stronger Benefits to Attract & Retain Staff: With competition for hygienists, assistants, and associate dentists at an all-time high, boosted 401(k) limits and profit-sharing contributions can help your practice stand out.
• Plan Amendments May Be Needed: If your practice sponsors a 401(k):
  • Do you currently allow Roth contributions?
  • Is your plan set up to comply with the 2026 Roth catch-up mandate?
  • Are employer match formulas still competitive under the new thresholds?
  • These questions matter for retention and compliance.
• Better Long-Term Savings for You: If you’re behind on retirement savings due to student loans, practice acquisition debt, or years of reinvesting into the practice, these new limits give you a chance to accelerate your personal savings.

Examples From Real Dental Practice Situations

Example 1: Practice Owner Catching Up

Dr. Molina, age 52, wants to boost retirement savings as she shifts focus from growth to stability. In 2026, she can defer up to $32,500 into her 401(k) (regular + catch-up), up from $31,000 today. With profit sharing, her total plan contribution could reach $72,000, reducing taxable income significantly.

Example 2: Associate Retention Strategy

A busy multi-doctor practice wants to retain a high-performing associate. By adjusting its profit-sharing strategy under the new 2026 limits, the practice increases the associate’s potential retirement benefit without raising base compensation. The enhanced package plays a key role in retaining talent.

What Dental Practices Should Do Now

1. Review your 401(k) plan design and confirm whether your plan can support:
   • Roth contributions
   • Mandatory Roth catch-up for high earners
   • Updated profit-sharing formulas
2. Forecast your 2026 tax position and model how higher contributions affect:
   • Taxable income
   • Cash flow
   • Owner distributions
   • Long-term retirement projections
3. Communicate updates to your team. Employees often underestimate the value of an upgraded retirement plan. Clear communication reinforces your investment in their financial well-being.
4. Align with year-end compensation decisions since bonus timing, distributions, and equipment purchases can affect how much you’re able to defer.
5. Build the changes into your planning calendar, because plan amendments, employee notices, and new contribution elections must happen before January 2026.

Make 2026 Your Most Strategic Savings Year Yet

These retirement plan adjustments create opportunities for practice owners, key employees, and the entire dental team. But the benefits only materialize with proactive planning.

At Edwards & Associates PC, we help dental practices integrate these changes into tax strategy, owner compensation, and long-term financial planning. Whether you’re preparing for retirement, recruiting associates, or optimizing employee benefits, now is the time to update your strategy for 2026. Contact our team today to review your retirement plan, model your tax savings, and ensure your practice is prepared to maximize these new limits.