On November 12, 2026, the IRS issued IR-2026-136, announcing retirement-related cost-of-living adjustments for tax year 2027. The main employee contribution limit for 401(k) plans rises to $25,500, while the annual IRA contribution limit remains $7,500.
The detailed guidance is in Notice 2026-66. These are 2027 amounts; do not use them as the limits for 2026 contributions.
Employee Deferrals and Catch-Up Contributions
The $25,500 employee deferral limit, up from $24,500 in 2026, applies to 401(k), 403(b), governmental 457 plans and the federal Thrift Savings Plan. It does not apply to starter 401(k) deferral-only arrangements or safe harbor deferral-only 403(b) plans, which have a separate $6,500 base limit for 2027. It is not the same as the separate limit on total employee and employer contributions to a defined contribution plan.
For eligible participants in most of these plans:
- The regular catch-up limit for people age 50 or older rises to $8,500, from $8,000 in 2026. Combined with the base limit, that generally allows up to $34,000 in 2027.
- For participants who turn 60, 61, 62 or 63 in 2027, the higher catch-up limit is $11,750 instead of $8,500. The two catch-up amounts are alternatives, not amounts to add together.
Plan terms and other rules still matter, including rules on whether catch-up contributions must be Roth contributions. Confirm the applicable treatment with the plan administrator rather than assuming every contribution is pretax.
IRA Limits Remain Unchanged
For 2027, the IRS lists an annual IRA contribution limit of $7,500, with an additional $1,100 catch-up contribution for eligible individuals age 50 or older. These are not separate allowances for each IRA account.
The contribution limit does not guarantee that a traditional IRA contribution is deductible or that a taxpayer may make a full Roth IRA contribution. Eligibility can depend on compensation, income, filing status and workplace retirement plan coverage. The notice updates income phase-out ranges for 2027; check the rules that apply to your circumstances.
SIMPLE Plan Amounts Also Change
The amount individuals can generally contribute to SIMPLE retirement accounts rises to $17,500, from $17,000 in 2026. Certain eligible SIMPLE arrangements have a higher $19,100 limit for 2027.
The release also lists different SIMPLE catch-up limits:
- The regular age-50-or-older catch-up limit remains $4,000 for most SIMPLE plans.
- A different $3,850 catch-up limit continues to apply to certain SIMPLE plans.
- The higher catch-up limit for participants who turn 60, 61, 62 or 63 remains $5,250.
Do not apply the ordinary 401(k) catch-up figures to a SIMPLE plan. Ask the plan administrator which category applies before setting contributions.
What Schedule C Filers Should Review
If you are self-employed, identify the type of retirement arrangement you actually have before using any of these figures. A personal IRA, a SIMPLE plan and a one-participant 401(k) have different rules. An employee deferral limit is not a universal ceiling on all retirement contributions, and it does not by itself establish a deductible amount.
Review your expected business income and contribution records with a qualified tax professional or plan administrator. This announcement does not calculate your individual contribution allowance or the tax treatment of a payment made from your business account.
Simple-C helps Schedule C filers organize business income, expenses and supporting records. It does not administer retirement plans, determine contribution limits or replace professional advice.
This article provides general information, not tax, legal or investment advice. Contribution and deduction eligibility depend on your circumstances, plan terms and applicable rules. Confirm the 2027 guidance on IRS.gov and consult a qualified professional before contributing.