The IRS adjusts retirement plan contribution limits annually based on cost-of-living changes, and the 2027 limits bring increases across multiple account types. Whether you contribute to a 401(k), IRA, or other tax-advantaged retirement plan, understanding these new limits helps you maximize your savings and take full advantage of tax benefits.

401(k), 403(b), and 457(b) Plans

For 2027, the employee contribution limit for 401(k), 403(b), and most 457(b) plans is $24,000, up from the 2026 limit (IRS Retirement Plans). This applies to traditional (pre-tax) and Roth (after-tax) contributions, or any combination of the two, as long as your total does not exceed the annual limit.

If you are age 50 or older by December 31, 2027, you can make an additional catch-up contribution of $8,000, bringing your total potential contribution to $32,000. This catch-up provision has existed for years, but the SECURE 2.0 Act added a new enhanced catch-up for workers ages 60, 61, 62, and 63.

For those in this 60-63 age range, the catch-up limit increases to $11,250 in 2027 (the greater of $11,250 or 150% of the regular catch-up amount). This means eligible savers can contribute up to $35,250 in 2027, a significant boost designed to help people in their final working years accelerate retirement savings (DOL 401(k) Plans).

The total contribution limit (employee contributions plus employer match and profit-sharing) for 2027 is $70,000, or $81,250 if you qualify for the enhanced age 60-63 catch-up. These totals include all sources: your deferrals, employer matching contributions, employer profit-sharing, and any after-tax contributions your plan allows.

Traditional and Roth IRA

The contribution limit for both traditional and Roth IRAs rises to $7,500 for 2027. If you are 50 or older, you can contribute an additional $1,000 catch-up contribution, for a total of $8,500.

Unlike 401(k) plans, IRA contributions have income-based phase-out ranges that can reduce or eliminate your ability to contribute to a Roth IRA or deduct traditional IRA contributions if you are covered by a workplace retirement plan.

For Roth IRA contributions in 2027, the phase-out ranges are:

  • Single filers: phase-out begins at modified adjusted gross income (MAGI) of $150,000 and complete phase-out at $165,000
  • Married filing jointly: phase-out begins at $236,000 and complete phase-out at $246,000

If your income exceeds these limits, you can still make non-deductible traditional IRA contributions and potentially convert them to a Roth IRA (a strategy known as a backdoor Roth IRA, though this has tax implications to consider with a qualified tax advisor).

For traditional IRA deduction eligibility when you (or your spouse) are covered by a workplace retirement plan:

  • Single filers: phase-out begins at $79,000 MAGI
  • Married filing jointly: phase-out begins at $126,000 if the contributor is covered by a workplace plan, or $236,000 if only the spouse is covered

SEP IRA and SIMPLE IRA

Self-employed individuals and small business owners have higher contribution options. For SEP IRAs in 2027, you can contribute up to 25% of compensation or $70,000, whichever is less.

Read also: IRS Raises 401(k) and IRA Contribution Limits for 2026

SIMPLE IRA plans allow employee deferrals of $16,500 in 2027, with a $4,000 catch-up contribution for those 50 and older, bringing the total to $20,500. The SIMPLE IRA enhanced catch-up for ages 60-63 is $5,500, allowing a total contribution of $22,000 for this age group.

Planning Your 2027 Contributions

These limits represent the maximum you can contribute, but your actual contribution depends on your income, budget, and retirement goals. Here are practical steps to maximize the new limits:

Review your current contribution rate. If you are contributing a fixed dollar amount rather than a percentage of salary, you may need to adjust your payroll deduction to reach the new $24,000 limit. For example, contributing $2,000 per month gets you to $24,000 annually.

Take full advantage of employer matching. Always contribute at least enough to capture your full employer match before worrying about maxing out your personal contributions. A 50% match on 6% of salary is immediate 50% return on that portion of your savings.

Adjust contributions if you turn 50, 60, or 64 during 2027. The catch-up contribution eligibility is based on your age as of December 31, 2027. If you turn 50 this year, you become eligible for catch-up contributions for the full year. If you turn 64, you lose access to the enhanced 60-63 catch-up amount and revert to the standard $8,000 catch-up for 401(k) plans.

Consider the Roth option if your plan offers it. While traditional pre-tax contributions reduce your current taxable income, Roth contributions grow tax-free and face no required minimum distributions in retirement. For younger workers or those expecting higher tax rates in retirement, Roth contributions can provide long-term value.

Verify limits before December contribution deadlines. For workplace plans like 401(k)s, contributions must be made by December 31, 2027. IRA contributions have until the tax filing deadline in April 2028, giving you extra time to maximize those accounts (FINRA Investors).

What Changed for 2027

The increases from 2026 to 2027 reflect the IRS cost-of-living adjustment formula. The $24,000 limit for 401(k) plans represents a modest increase, continuing the pattern of gradual adjustments. The IRA limit increase to $7,500 is the first increase in several years, as IRA limits tend to rise in larger, less frequent increments.

The enhanced catch-up for ages 60-63 is a key feature from the SECURE 2.0 Act and continues to phase in. This provision recognizes that many workers in their early 60s are in peak earning years and may have more capacity to save as other financial obligations (such as mortgages or college tuition) decline.

Remember that contribution limits are maximums, and your personal situation may warrant different contribution levels. The information here is current as of October 2026; verify the final 2027 limits at IRS.gov before making contribution decisions, as annual adjustments can change based on inflation data. This article provides educational information and is not personalized financial advice. Consult a qualified financial advisor or tax professional for guidance specific to your circumstances.