IRS Sets 2027 401(k) Deferral Limit at $25,500, Up From $24,500

On Nov. 12, 2026, the Internal Revenue Service announced the 2027 contribution limits for 401(k) plans, SIMPLE retirement accounts and individual retirement accounts. The employee deferral limit for 401(k) plans rises to $25,500 from $24,500 in 2026. The IRS release, numbered IR-2026-136, says the figures apply to tax year 2027.

The release also raises the 401(k) catch-up amounts for older workers, adjusts the income ranges for IRA deductions and Roth IRA contributions, and keeps the IRA contribution limit unchanged at $7,500. The sections below cover each category.

The 401(k) Deferral Limit Rises by $1,000

The $25,500 limit applies to 401(k), 403(b), governmental 457 and Thrift Savings Plan accounts, according to the release. The IRS retirement topics page, last updated April 8, 2026, lists the 2026 401(k) figure at $24,500. The increase for 2027 is therefore $1,000.

The release presents these plan types together, so one deferral figure covers all four. IRS Chief Executive Officer Frank J. Bisignano said that, along with the Working Families Tax Cuts, the increase in pension limits will help American families keep more of what they earn.

The IRS says the 2026 amounts on its retirement topics page are subject to cost-of-living adjustments.

2027 401(k) Limit
The IRS set the 2027 employee deferral limit for 401(k), 403(b), governmental 457 and Thrift Savings Plan accounts at $25,500, up from $24,500 for 2026, in release IR-2026-136 dated Nov. 12, 2026.

Catch-Up Limits for Workers 50 and Older

Workers aged 50 and older can generally contribute an extra $8,500 under the 2027 catch-up in most plans, up from $8,000 in 2026. The release says participants in most plans who are 50 and older generally can contribute up to $34,000 each year, starting in 2027. That equals the $25,500 deferral plus the $8,500 catch-up.

Workers aged 60 to 63 in most plans have a higher catch-up of $11,750 for 2027, above the standard $8,500 figure. The 2026 figure for that age band was $11,250, according to the IRS retirement topics page.

The release refers readers to IRS Notice 2026-66 for details on these and other retirement-related cost-of-living adjustments for 2027.

SIMPLE Plan Limits

The 2027 contribution limit for SIMPLE retirement accounts is $17,500, up from $17,000. The release lists a separate applicable SIMPLE limit of $19,100, up from $18,100.

The SIMPLE catch-up amounts are unchanged. The release lists $4,000 for workers aged 50 and older in SIMPLE plans, $3,850 for workers aged 50 and older in applicable SIMPLE plans, and $5,250 for workers aged 60 to 63.

The standard SIMPLE limit rises by $500 and the applicable SIMPLE limit by $1,000, while the catch-up figures do not change. The IRS retirement topics page lists the 2026 SIMPLE 401(k) deferral limit at $17,000.

For 2027, the 401(k) deferral limit rises by $1,000 while the IRA limit stays where it is.

IRA Limits Hold at $7,500 as Income Ranges Rise

The IRA contribution limit stays at $7,500, and the catch-up for workers aged 50 and older stays at $1,100. The release lists both as unchanged from 2026.

The release also sets higher income ranges for deducting traditional IRA contributions. For a single person covered by a workplace plan, the 2027 range is $83,000 to $93,000, up from $81,000 to $91,000. For married couples filing jointly where the contributing spouse is covered, it is $133,000 to $153,000, up from $129,000 to $149,000. For a spouse who is not covered by a workplace plan and is married to a covered spouse, the range is $250,000 to $260,000, up from $242,000 to $252,000. For married filing separately with coverage, the range stays at $0 to $10,000.

Roth IRA income ranges also rise. For single filers and heads of household, the range is $158,000 to $173,000, up from $153,000 to $168,000. For married couples filing jointly, it is $250,000 to $260,000, up from $242,000 to $252,000. The married filing separately range remains $0 to $10,000.

Income limits for the Saver’s Credit also rise for contributions made to ABLE accounts after Dec. 31, 2026. Married couples filing jointly have a limit of $83,000, up from $80,500. Heads of household have $62,250, up from $60,375. Single filers and married filing separately have $41,500, up from $40,250.

Across the plan types in the release, the 2027 changes raise employee deferral limits by $1,000 for 401(k) plans, by $500 for SIMPLE plans and by $1,000 for applicable SIMPLE plans. For 2027, the 401(k) deferral limit rises by $1,000 while the IRA limit stays where it is.