IRS Raises 2027 401(k) Limit to $25,500: New Tax Brackets & Key Changes
The IRS raised the 2027 401(k) limit to $25,500 and lifted tax brackets — here is what changes for your paycheck, savings and Roth catch-ups.
Image: Wikimedia Commons / Tony Webster
WASHINGTON — The Internal Revenue Service said on November 12 that workers can put up to $25,500 into a 401(k) in 2027, a $1,000 increase from the $24,500 limit in 2026, in its annual update for retirement plans. The IRS also left the individual retirement account limit unchanged at $7,500, raised the standard deduction, and lifted the income thresholds for every federal tax bracket.
The figures come from IRS news release IR-2026-136 and Notice 2026-66, published on November 12, and apply to the 2027 tax year from January. The tax-bracket figures arrived a week earlier, on November 5, in IRS news release IR-2026-133 and Revenue Procedure 2026-35. The figures move with third-quarter inflation of 3.7%.
Key Takeaways
- The 401(k) limit rises to $25,500 for 2027, up $1,000 from $24,500 in 2026, covering 401(k), 403(b), most 457 and Thrift Savings Plan accounts.
- Workers aged 50 and older can add $8,500, for a $34,000 total; workers aged 60 to 63 can add $11,750, for a $37,250 total.
- The IRA limit stays at $7,500; the standard deduction rises to $16,600 for single filers and $33,200 for married couples filing jointly.
- A new federal Saver's Match worth up to $1,000 starts for tax years after December 31, 2026.
| 2027 retirement limit | 2026 | 2027 |
|---|---|---|
| 401(k) employee deferral | $24,500 | $25,500 |
| Catch-up, age 50 and older | $8,000 | $8,500 |
| Catch-up, ages 60 to 63 | $11,250 | $11,750 |
| IRA contribution | $7,500 | $7,500 |
| SIMPLE IRA | $17,000 | $17,500 |
What Is the 2027 401(k) Contribution Limit?
The $25,500 limit covers what workers can put into a 401(k), 403(b), most 457 plans and the federal Thrift Savings Plan from their own pay in 2027. Combined, worker and employer contributions can reach $75,000 next year, up from $72,000.
Catch-up contributions rise at every age band. Savers aged 50 and older can add $8,500 on top of the $25,500, taking their total to $34,000. Savers who turn 60, 61, 62 or 63 during 2027 get the larger catch-up of $11,750, taking their total to $37,250.
2027 Tax Brackets and Standard Deduction: What Changes
The seven income tax rates stay the same for 2027, but the thresholds rise by about 3.2%. The 10% rate applies up to $12,800 of taxable income for single filers and $25,600 for married couples filing jointly. The 12% rate runs to $52,025 single and $104,050 joint, and the top 37% rate starts at $661,375 single and $793,650 joint.
The standard deduction rises to $16,600 for single filers, up $500, and to $33,200 for married couples filing jointly, up $1,000. The 0% long-term capital gains rate now covers taxable income up to $102,100 for joint filers, up from $98,900.
How the 2027 IRS Changes Affect Your Pay and Retirement Savings
Act on the higher limit during open enrolment, before the new year starts. A worker saving the full $25,500 would set aside about $981 from each of 26 biweekly paydays, or about $2,125 a month. Anyone already saving the 2026 maximum must raise the deferral rate to use the extra $1,000 of room. The Treasury Department has also hired private debt collectors for defaulted student loans.
The changes arrive alongside the Social Security Administration's 3.6% cost-of-living adjustment for 2027, worth about $75 more a month for the average retired worker. The 2027 Medicare Part B premium is expected to be announced in November.
Frequently Asked Questions
What is the 401(k) contribution limit for 2027?
The IRS set the 2027 limit at $25,500 for 401(k), 403(b), most 457 and Thrift Savings Plan accounts, up $1,000 from $24,500 in 2026. Workers aged 50 and older can add $8,500; workers aged 60 to 63 can add $11,750.
How much can I contribute to an IRA in 2027?
The IRA limit stays at $7,500 for 2027, with a $1,100 catch-up for people aged 50 and older. You can still make 2026 IRA contributions until April 15, 2027.
What is the standard deduction for 2027?
The IRS set the 2027 standard deduction at $16,600 for single filers and $33,200 for married couples filing jointly. The seven tax rates stay the same; only the income thresholds rise.
Do catch-up contributions have to be Roth in 2027?
For workers whose pay from their employer topped $150,000 in 2026, catch-up contributions must go in as Roth, after tax, under a rule in force since January 2026. The wage threshold rises to $155,000 for 2027.
