The IRS 401(k) limit 2027 rises to $25,500, the Internal Revenue Service announced on Thursday, November 12. The new ceiling is $1,000 higher than the $24,500 limit in place for 2026 and applies to employee contributions for the 2027 tax year.
The IRS published the figures in Notice 2026-66, with the details set out in news release IR-2026-136. The higher limit covers 401(k) plans, 403(b) plans, governmental 457 plans and the federal Thrift Savings Plan. The limits apply to paychecks dated in calendar 2027, so workers who want to use the extra room need to update their contribution election during open enrollment, before their first January paycheck.
The annual limit on contributions to traditional and Roth individual retirement accounts stays at $7,500 for 2027. The IRA catch-up limit for people aged 50 and older also stays at $1,100.
The IRS 401(k) limit 2027 is an annual cost-of-living adjustment, the kind the agency issues each year to keep retirement savings limits in line with inflation. The figures do not change what anyone can contribute for the rest of 2026. The IRS 401(k) limit 2027 sets the highest employee deferral ceiling yet, and it arrives as open enrollment season reaches many workplaces.
IRS 401(k) limit 2027 and catch-up amounts
The catch-up limit for employees aged 50 and older who take part in most 401(k), 403(b), governmental 457 and Thrift Savings Plan accounts rises by $500 to $8,500 for 2027. The IRS says that means people aged 50 and older in most of these plans can generally contribute up to $34,000 a year starting in 2027.
A higher catch-up limit applies to employees aged 60, 61, 62 or 63 under a change made in the SECURE 2.0 Act of 2022. For 2027, that higher catch-up limit rises to $11,750 from $11,250. Workers in that age group can therefore contribute up to $37,250 next year.
The employee deferral limit for SIMPLE IRA and SIMPLE 401(k) plans rises to $17,500 from $17,000. The total annual additions cap, which covers employee contributions plus employer matches and profit-sharing, rises to $75,000 from $72,000. The IRS 401(k) limit 2027 leaves the IRA limits unchanged, so savers who use both kinds of account face different ceilings next year.
IRS 401(k) limit 2027 and income phaseouts
The income ranges that decide who can deduct traditional IRA contributions and who can contribute to a Roth IRA also move up for 2027. For single taxpayers covered by a workplace retirement plan, the phaseout range for deducting traditional IRA contributions rises to between $83,000 and $93,000, up from between $81,000 and $91,000 for 2026.
For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace plan, the range rises to between $133,000 and $153,000, up from between $129,000 and $149,000. For an IRA contributor who is not covered by a workplace plan and is married to someone who is, the range rises to between $250,000 and $260,000, up from between $242,000 and $252,000.
The income phaseout range for Roth IRA contributions rises to between $158,000 and $173,000 for singles and heads of household, up from between $153,000 and $168,000 for 2026. For married couples filing jointly, it rises to between $250,000 and $260,000, up from between $242,000 and $252,000.
IRS 401(k) limit 2027 and the new Saver’s Match
From 2027, the new federal Saver’s Match replaces the Saver’s Credit for retirement contributions. The match is a direct federal deposit into a retirement account of 50 percent of the first $2,000 contributed, up to $1,000 a year, for eligible lower- and moderate-income savers.
The IRS 401(k) limit 2027 is a ceiling, not a target. It gives workers permission to save more, but no money moves because a number changed in a government notice. The IRS 401(k) limit 2027 takes effect with the first January paycheck for workers who raise their election during open enrollment. For most households, $25,500 is not a realistic target, and the first step for many savers is to contribute enough to receive the full employer match, where one is offered.