The IRS has upped the amount individuals can contribute to their 401(k) plans in 2027 to $25,500, an increase of $1,000 from 2026, the tax agency said on Thursday. The limit on annual contributions to an individual retirement account remains $7,500.
The IRS also issued technical guidance on Thursday providing all cost‑of‑living adjustments impacting dollar limitations for pension plans and other retirement-related items for tax year 2027 in Notice 2026-66, posted today on IRS.gov.
“Along with the Working Families Tax Cuts, this increase in the pension limitations will help American families keep more of their hard-earned income,” IRS CEO Frank Bisignano said in a statement on Nov. 12. “With the new adjustment in place now, the IRS is giving taxpayers and employers the information needed to make retirement planning decisions for the year ahead.”
The annual contribution limit for employees who participate in 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan is increased to $25,500, up from $24,500 for 2026.
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IRS Bumps Up 401(k), IRA Contribution Limits for 2026
The limit on annual contributions to an IRA was kept at $7,500. The IRA catch‑up contribution limit for individuals aged 50 and older, which was amended under the SECURE 2.0 Act of 2022 (SECURE 2.0) to include an annual cost‑of‑living adjustment, remains $1,100.
The catch-up contribution limit that generally applies for employees aged 50 and older who participate in most 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan is increased to $8,500, up from $8,000 for 2026. Therefore, participants in most 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan who are 50 and older generally can contribute up to $34,000 each year, starting in 2027. Under a change made in SECURE 2.0, a higher catch-up contribution limit applies for employees aged 60, 61, 62, and 63 who participate in these plans. For 2027, this higher catch-up contribution limit is $11,750 instead of the $8,500 noted above.
The income ranges for determining eligibility to make deductible contributions to traditional IRAs, to contribute to Roth IRAs, and to claim the Saver’s Credit all increased for 2027.
Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If, during the year, either the taxpayer or the taxpayer’s spouse was covered by a retirement plan at work, the deduction may be reduced or phased out until it’s eliminated, depending on filing status and income. If neither the taxpayer nor the spouse is covered by a retirement plan at work, the phase-outs of the deduction don’t apply. The phase‑out ranges for 2027 are:
- For single taxpayers covered by a workplace retirement plan, the phase-out range is increased to between $83,000 and $93,000, up from between $81,000 and $91,000 for 2026.
- For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is increased to between $133,000 and $153,000, up from between $129,000 and $149,000 for 2026.
- For an IRA contributor who isn’t covered by a workplace retirement plan and is married to someone who is covered, the phase-out range is increased to between $250,000 and $260,000, up from between $242,000 and $252,000 for 2026.
- For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.
Additional phase-out ranges and limitations
Notice 2026-66 also provides limitations for 2027 for Roth IRAs, the Saver’s Credit, and SIMPLE retirement accounts.
- The income phase-out range for taxpayers making contributions to a Roth IRA is increased 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, the income phase-out range is increased to between $250,000 and $260,000, up from between $242,000 and $252,000 for 2026. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA isn’t subject to an annual cost-of-living adjustment and remains between $0 and $10,000.
- The income limit for the Saver’s Credit (for contributions made to ABLE accounts after Dec. 31, 2026) for low- and moderate-income workers is $83,000 for married couples filing jointly, up from $80,500 for 2026; $62,250 for heads of household, up from $60,375 for 2026; and $41,500 for singles and married individuals filing separately, up from $40,250 for 2026.
- The amount individuals can generally contribute to their SIMPLE retirement accounts is increased to $17,500, up from $17,000 for 2026. Under a change made in SECURE 2.0, individuals can contribute a higher amount to certain applicable SIMPLE retirement accounts. For 2027, this higher amount is increased to $19,100, up from $18,100 for 2026.
- The catch-up contribution limit that generally applies for employees aged 50 and older who participate in most SIMPLE plans remains $4,000. According to a change made in SECURE 2.0, the different catch-up limit that applies for employees aged 50 and older who participate in certain applicable SIMPLE plans remains $3,850. Under another change made in SECURE 2.0, the higher catch-up contribution limit that applies for employees aged 60, 61, 62, and 63 who participate in SIMPLE plans remains $5,250.
More information on these and other retirement-related cost-of-living adjustments for 2027 are in Notice 2026-66, which was posted on IRS.gov.
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