What are the 401(k) contribution limits for 2027?

For 2027, employees can defer up to $25,500 into a 401(k), $1,000 more than in 2026. The age 50 catch-up rises to $8,500, and the IRA limit stays at $7,500.

For 2027, an employee can defer up to $25,500 of pay into a 401(k), 403(b) or governmental 457 plan, up from $24,500 in 2026. Employees age 50 and older can add a catch-up of $8,500, for a total of $34,000. The IRS announced the new figures on November 12, 2026.¹ ²

Not every limit moved. The IRA contribution limit stays at $7,500 and the IRA catch-up stays at $1,100.¹

What changed for 2027?

The main plan limits, side by side:²

• Employee deferrals (401(k), 403(b), governmental 457): $25,500 for 2027 ($24,500 in 2026)
• Catch-up, age 50 and older: $8,500 for 2027 ($8,000 in 2026)
• Catch-up, ages 60 to 63: $11,750 for 2027 ($11,250 in 2026)
• Total added to an account (employee plus employer): $75,000 for 2027 ($72,000 in 2026)
• Pay that can be counted for plan purposes: $375,000 for 2027 ($360,000 in 2026)
• Highly compensated employee threshold: $170,000 for 2027 ($160,000 in 2026)
• Roth catch-up wage threshold: $155,000 for 2027 ($150,000 in 2026)
• SIMPLE IRA and SIMPLE 401(k) deferrals: $17,500 for 2027 ($17,000 in 2026)
• IRA contributions: $7,500 for 2027 ($7,500 in 2026)

Who gets the higher catch-up?

Employees who turn 60, 61, 62 or 63 during 2027 can use the higher catch-up of $11,750 instead of $8,500, if the plan offers it. That puts their total at $37,250. The higher catch-up came from SECURE 2.0, and plans can choose whether to include it.² ³

Since 2026, catch-ups for higher earners must go in as Roth. For 2027, that applies to employees whose 2026 FICA wages from the employer were more than $155,000.² ³ A plan with no Roth option cannot accept catch-ups from those employees at all, so the Roth feature matters more for a plan with several higher earners.

What does the employer need to do?

Most plan documents pick up the new limits automatically. The work is in payroll and in a few plan settings:

• Payroll needs the new deferral and catch-up limits loaded before the first 2027 paycheck, or deferrals stop early or run over.
• If the plan offers the age 60 to 63 catch-up, payroll has to know who qualifies by age, not only who is over 50.
• Payroll has to flag which employees are over the Roth catch-up wage threshold and send their catch-ups as Roth.
• Matching formulas that use pay are capped at the compensation limit, now $375,000.

The highly compensated employee threshold is used in nondiscrimination testing. Testing looks back a year, so the $170,000 figure generally applies to 2027 pay when the plan identifies highly compensated employees for 2028.

The tradeoff

Higher limits help employees who can save more, and they help owners and higher earners most, since they are the most likely to reach the cap. They do nothing for an employee who is not contributing at all. If a plan's average deferral rate is low, the limit is not what holds savings back; enrollment, the default rate and the match are.

Questions to ask about your plan

• Has your payroll provider confirmed it will load the 2027 limits before the first payroll of the year?
• Does your plan offer the age 60 to 63 catch-up, and does payroll know which employees qualify?
• Does your plan have a Roth option, and how many employees are over the Roth catch-up wage threshold?
• How many employees reached the deferral limit in 2026, and did any of them stop deferring early?
• Does your nondiscrimination testing use the right threshold for the right year?

If you would like a second set of eyes on how your plan and payroll handle the 2027 limits, start a conversation.

¹ Internal Revenue Service, “401(k) limit increases to $25,500 for 2027, IRA limit remains $7,500,” IR-2026-136, November 12, 2026.

² Internal Revenue Service, Notice 2026-66, 2027 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living.

³ SECURE 2.0 Act of 2022, Sections 109 and 603; Internal Revenue Code Section 414(v).