Published November 12, 2026 · By
The 401k contribution limits for 2027 will rise by $1,000, the IRS announced Thursday, letting workers put up to $25,500 into a 401(k), 403(b), most 457 plans or the federal Thrift Savings Plan next year. The cap on individual retirement accounts, however, will stay at $7,500. The figures, released November 12 in IRS news release IR-2026-136 and Notice 2026-66, set the savings ceilings that millions of Americans will use when they choose payroll deductions during open enrollment this fall.
What the IRS Announced on 401k Contribution Limits
The IRS adjusts 401k contribution limits and other retirement plan caps each year to account for changes in the cost of living. For 2027, the agency said the elective deferral limit for employees in 401(k), 403(b) and governmental 457 plans and the Thrift Savings Plan increases to $25,500, up from $24,500 in 2026. Among the 401k contribution limits, that is the headline number most workers will notice on their benefits portal.
The catch-up portion of the 401k contribution limits, for workers age 50 and older, also goes up, from $8,000 in 2026 to $8,500 in 2027. Combined with the base limit, an employee who is 50 or older could defer as much as $34,000 next year, according to the IRS release.
The new 401k contribution limits apply to contributions made from paychecks dated in calendar year 2027. Amounts deferred in 2026 still fall under this year's caps.
The higher catch-up for ages 60 to 63
Under the SECURE 2.0 Act, a separate and larger catch-up applies to workers who turn 60, 61, 62 or 63 during the year. The IRS said that amount will be $11,750 in 2027. SHRM, which reported on the announcement, noted the figure was $11,250 for 2026. That means a 61-year-old participant in a plan that offers this option could set aside up to $37,250 in 2027 through salary deferrals alone.
IRA limit stays at $7,500
Not every limit moved. The annual contribution cap for traditional and Roth IRAs remains $7,500, and the IRA catch-up for people 50 and older stays at $1,100, the IRS said. The release did not explain the reason. IRA limits are indexed to inflation but change only in $500 steps, so a modest cost-of-living adjustment can leave them flat for a year.
2027 401k Contribution Limits at a Glance
Here are the 2027 401k contribution limits and related caps from the IRS release, with the 2026 amounts for comparison:
- 401(k), 403(b), governmental 457 and TSP deferral limit: $25,500 (up from $24,500)
- Catch-up for ages 50 and older in those plans: $8,500 (up from $8,000)
- Higher catch-up for ages 60 to 63: $11,750 (SHRM reports $11,250 for 2026)
- Traditional and Roth IRA limit: $7,500 (unchanged)
- IRA catch-up for ages 50 and older: $1,100 (unchanged)
- SIMPLE retirement account limit: $17,500 (up from $17,000)
- SIMPLE catch-up for ages 50 and older: $4,000 (unchanged)
The SIMPLE limit for certain applicable plans rises to $19,100 from $18,100, while the SIMPLE catch-up for ages 60 to 63 holds at $5,250. Workers at small businesses that offer SIMPLE plans should check with their employer to see which category applies.
Income Ranges for IRA Deductions and Roth IRAs
Although the IRA cap itself did not change, the income ranges that determine who can deduct a traditional IRA contribution or contribute directly to a Roth IRA did go up. These phase-out ranges, released alongside the 401k contribution limits, matter for households near the thresholds.
Traditional IRA deduction phase-outs
For single filers covered by a workplace retirement plan, the deduction phases out between $83,000 and $93,000 of modified adjusted gross income in 2027, up from $81,000 to $91,000. For married couples filing jointly where the spouse making the IRA contribution is covered by a workplace plan, the range is $133,000 to $153,000, up from $129,000 to $149,000.
When the IRA contributor is not covered by a workplace plan but is married to someone who is, the deduction phases out between $250,000 and $260,000, up from $242,000 to $252,000. For a married person filing separately who is covered by a workplace plan, the range stays at $0 to $10,000 because it is not indexed for inflation.
Roth IRA income limits
The income phase-out range for Roth IRA contributions rises to $158,000 to $173,000 for single taxpayers and heads of household, from $153,000 to $168,000. For married couples filing jointly, it climbs to $250,000 to $260,000, from $242,000 to $252,000. The range for married individuals filing separately stays at $0 to $10,000.
Saver's Credit thresholds
The income limit for the Saver's Credit, which helps low- and moderate-income workers who save for retirement, rises to $83,000 for married couples filing jointly, $62,250 for heads of household and $41,500 for single filers and those married filing separately. The IRS release also refers to the credit in connection with ABLE account contributions made after December 31, 2026.
How the Announcement Was Received
IRS Chief Executive Officer Frank J. Bisignano said in a statement that the adjustments "will help American families keep more of their hard-earned income," according to CPA Practice Advisor. The agency said it issued technical guidance covering all of the cost-of-living adjustments that affect pension plans and other retirement-related items for tax year 2027.
The announcement follows a separate IRS release on November 5 that set 2027 tax brackets, a $33,200 standard deduction for married couples filing jointly and other inflation adjustments for returns filed in 2028. Benefits trade publications, including SHRM and 401k Specialist, reported the new 401k contribution limits on Thursday and pointed employers to Notice 2026-66 for payroll and plan-document updates.
The higher 401k contribution limits arrive during a period of elevated inflation readings and rising borrowing costs. October consumer prices rose more than expected, and markets now expect the Federal Reserve to consider a rate increase in December, as Meridian Pioneer reported in its coverage of Fed rate hike odds.
What It Means for You
For most workers, the practical question raised by the new 401k contribution limits is whether to raise their payroll deferral for 2027. Here is what the changes could mean in everyday terms. This is our analysis based on the IRS figures, not a recommendation for any individual situation.
If you already max out your 401(k)
Workers who contributed the full $24,500 in 2026 will not automatically move to the new ceiling. Many plans set deferrals as a percentage of pay, so check whether your current percentage will reach $25,500 in 2027. Spreading the extra $1,000 evenly works out to about $38 per biweekly paycheck. Some plans stop employer matching once you hit the annual limit early, so pacing contributions across the year can matter.
If you are 50 or older
Under the 2027 401k contribution limits, catch-up savers can contribute $500 more, and those ages 60 to 63 can use the larger catch-up if their plan offers it. Under SECURE 2.0, some higher earners must make catch-up contributions on a Roth, after-tax basis. Ask your plan administrator how that rule applies to your pay before you set your elections.
If you rely on an IRA
With the IRA limit flat at $7,500, the bigger change is the higher income ranges. Some savers who were just above the Roth IRA cutoff in 2026 may qualify for direct contributions in 2027. Retirees and near-retirees can also review how these accounts fit with Social Security; our look at the Social Security trust fund explains the long-term outlook for benefits.
Key steps before January
- Log in to your benefits portal during open enrollment and update your deferral rate for 2027.
- Confirm whether your plan offers the age 60 to 63 catch-up.
- Check your 2027 income estimate against the IRA and Roth phase-out ranges.
- Review the official figures in the IRS news release.
Even if you cannot reach the new 401k contribution limits, raising your deferral by one percentage point or contributing enough to receive the full employer match are steps many workers consider. The limits are ceilings, not targets.
Note: This article is for information only and is not financial advice. Consult a qualified tax or financial professional about your own circumstances.
Sources: Internal Revenue Service (IR-2026-136 and Notice 2026-66, November 12, 2026; IR-2026-133, November 5, 2026), SHRM, CPA Practice Advisor, 401k Specialist.
