2027 401(k) limit: $25,500, locked in by September CPI
The September CPI closed the Q3 average at 335.279, so the 2027 401(k) limit is $25,500 by formula; the IRA limit stays at $7,500. IRS confirms in November.
The last of the three inflation reports that decide next year’s 401(k) limit is in, and it settled the question. The short answer: applying the statutory formula in 26 U.S.C. §402(g)(4) to the CPI data, the 2027 401(k) limit is $25,500 and the age-50 catch-up is $8,500, while the IRA limit, which 26 U.S.C. §219(b)(5)(C) indexes to the chained CPI-U instead, stays at $7,500. September’s CPI-U came in at 336.940, above the 335.122 it needed, and the third-quarter average closed at 335.279. The 401(k) figures are determined by the third-quarter CPI average published October 14; the IRS confirms the official figure in its annual Notice, usually in November.
The 2027 picture, at a glance
| Limit | 2026 (official) | 2027 (determined by formula) | Exact CPI threshold |
|---|---|---|---|
| 401(k) / 403(b) / 457 elective deferral | $24,500 | $25,500 | Q3 2026 CPI-U average ≥ 334.67 for $25,500; actual 335.279 (September 336.940 vs 335.122 needed) |
| IRA | $7,500 | $7,500 | Not the Q3 CPI-U: chained CPI-U average, September 2025 to August 2026, ≥ 186.79 for $8,000; actual 182.857 |
| Catch-up contribution, age 50+ | $8,000 | $8,500 | Same 334.67 threshold as the 401(k) deferral; cleared |
The 2026 column is confirmed, from IRS Notice 2025-67. The 2027 column is this page doing arithmetic the statute prescribes with the closed third-quarter average (and, for the IRA, the chained CPI-U window that closed with August), not the IRS speaking; the Notice due in November makes it official.
The law behind the number
Most coverage of these limits treats the annual increase as a mystery the IRS reveals each fall. It is not. The 401(k) elective deferral limit is indexed by a formula written directly into the tax code, at 26 U.S.C. § 402(g)(4), and the text is exact about how the adjustment works:
“the Secretary shall adjust the $15,000 amount under paragraph (1)(B) at the same time and in the same manner as under section 415(d), except that the base period shall be the calendar quarter beginning July 1, 2005, and any increase under this paragraph which is not a multiple of $500 shall be rounded to the next lowest multiple of $500.”
Worth flagging up front: this is a different clock than the one running most of the other 2027 numbers on this site. The 401(k) and catch-up limits here index off a single third-quarter CPI-U average, not the 12-month-to-August C-CPI-U window the IRS 2027 inflation adjustments tracker uses for the brackets, the FSA cap, and the gift exclusion — so the two pages are watching different BLS releases even though both are projecting 2027 IRS numbers. The IRA limit is the exception: by statute it runs on that same 12-month C-CPI-U window, as explained below.
In practice, the IRS applies that instruction using CPI-U — the Bureau of Labor Statistics’ broad urban consumer price index, not seasonally adjusted — averaged over the third calendar quarter, July through September. The IRA limit does not follow that mechanic. Its provision, § 219(b)(5)(C), increases its own $5,000 base by “the cost-of-living adjustment determined under section 1(f)(3)”, with “calendar year 2007” substituted for “calendar year 2016”: the chained CPI-U averaged over the 12 months ending August 31, measured against the regular CPI-U average for the 12 months ending August 2007, scaled to the chained index by the 2016 ratio between the two. Its rounding language is just as explicit, requiring any adjusted amount that is not a multiple of $500 to round down to the next lower multiple of $500. The age-50 catch-up contribution is indexed under yet a third provision, § 414(v)(2)(C), using the same $5,000-and-2005 mechanics as the elective deferral limit itself. A separate, larger catch-up applies to savers ages 60 through 63 under SECURE 2.0; that figure sits outside this projection, and the official 2026 limits section below covers where it currently stands.
The control: reproducing 2026, three for three
A formula is only as trustworthy as its ability to reproduce a known answer, so before projecting anything, it is worth running 2026 back through the statute and checking it against what IRS Notice 2025-67 actually set. The base-period average CPI-U for the third quarter of 2005 — July at 195.4, August at 196.4, September at 198.8 — comes to 196.867. The 2025 measurement quarter, averaging July’s 323.048, August’s 323.976 and September’s 324.800, comes to 323.941.
For the 401(k) deferral: 15,000 × (323.941 / 196.867) = $24,682, which rounds down to the next lowest multiple of $500 — $24,500. That is exactly the 2026 limit.
For the catch-up, run off the same base and the same ratio: 5,000 × (323.941 / 196.867) = $8,227, rounding down to $8,000. Exactly the 2026 catch-up.
For the IRA, swap in its own index. The chained CPI-U averaged from September 2024 through August 2025 is 177.206; the denominator is the regular CPI-U average for September 2006 through August 2007 (204.873) scaled by the 2016 ratio of the chained to the regular index (135.993 / 238.649), or 116.746. So 5,000 × (177.206 / 116.746) = $7,589, rounding down to $7,500. Exactly the 2026 IRA limit. A third-quarter CPI-U shortcut would also give $7,500 for 2026, but it gives $7,500 for 2025, when Notice 2024-80 kept the limit at $7,000; the statutory method gives $7,410 for 2025, which rounds down to $7,000.
Three inputs, three outputs, three exact matches against the official Notice. That is the same discipline this site applies to tracking the Social Security COLA: reproduce the confirmed prior figure with the statutory formula before trusting the formula to project the next one.
The threshold that decided 2027: 334.67
With the method validated, the only open question for 2027 was what September 2026’s CPI-U would turn out to be. July came in at 333.918, essentially flat against June, August followed at 334.980, a rise of 0.32% month over month, and September, published October 14, closed the quarter at 336.940. The three months average 335.279.
For the 401(k) deferral to reach the next $500 step and land at $25,500 rather than $25,000, the unrounded result had to clear 25,500, which requires the index ratio to hit 25,500 / 15,000 = 1.7 — or, solved for the index itself, 1.7 × 196.867 = 334.67. With July and August summing to 668.898, the quarter needed September to reach 335.122, only 0.04% above August’s level. It came in at 336.940, 0.59% above August. The Q3 average of 335.279 gives 15,000 × (335.279 / 196.867) = $25,546, which rounds down to $25,500. So the answer was not a coin flip after all: it landed on the higher side, with room to spare.
The age-50 catch-up shared that exact same fork, for a clean reason: both provisions index off the identical 196.867 base and the identical $5,000-scaled-to-$15,000 relationship, so the ratio needed for $8,500 — 5,000 × ratio ≥ 8,500, or ratio ≥ 1.7 — is the same ratio needed for $25,500, and the same September figure of 335.122 decided both. The quarter cleared it, so the deferral and the catch-up stepped up together, to $25,500 and $8,500 (5,000 × 335.279 / 196.867 = $8,515, rounded down).
The IRA was never on that fork. Its window, the chained CPI-U from September 2025 through August 2026, closed with the August index published September 11: the eleven monthly values BLS published for it (there is no October 2025 index) average 182.857, so 5,000 × (182.857 / 116.746) = $7,831, which rounds down to $7,500, unchanged from 2026. Reaching $8,000 would have taken an average of about 186.79. (An earlier version of this page ran the IRA on the third-quarter CPI-U and showed $8,000; that is not the index section 219(b)(5)(C) names, and it fails to reproduce the 2025 limit.)
None of this lines up with how other 2027 numbers already work. The 2027 HSA contribution limits were confirmed by the IRS back in May, because HSA indexing runs on a different calendar. The 2027 Social Security wage base runs on the national average wage index rather than CPI, so it moves on different data. The 401(k) limit and its catch-up sit furthest out on that calendar: their CPI-U quarter only finished on September 30, 2026, and the figure was published October 14.
Three more 2027 limits, also determined
The same third-quarter formula determines three limits that matter to higher earners and small-business owners. Each uses its own base quarter, reproduced here against the 2026 figures in IRS Notice 2025-67 and the 2025 figures in Notice 2024-80:
| Limit | 2026 (Notice 2025-67) | Base quarter, rounding | 2027, with the Q3 average closed |
|---|---|---|---|
| Total annual additions to a defined contribution plan, section 415(c)(1)(A) | $72,000 | Q3 2001 (177.767), down to $1,000 | $75,000 |
| Compensation that can be counted, section 401(a)(17) (also the SEP-IRA limit) | $360,000 | Q3 2001, down to $5,000 | $375,000 |
| Highly compensated employee threshold, section 414(q)(1)(B) | $160,000 | Q3 1996 (157.367), down to $5,000 | $170,000 |
The control reproduces all three 2026 amounts from the 2025 third-quarter average of 323.941, and all three 2025 amounts from the 2024 average. For 2027 the closed average of 335.279 puts the first two at $75,000 and $375,000, and the highly compensated employee threshold at $170,000. Section 414(q)(1) fixes that threshold’s base as the quarter ending September 30, 1996; it reached $170,000 because September did not fall to 334.31 or lower, the level that would have pulled it back to $165,000. (An earlier version of this page used the fourth quarter of 1996 as the base and showed $165,000; that base also fails to reproduce the 2025 threshold of $160,000.) Because the test looks back a year, the 2027 threshold identifies who counts as highly compensated for 2028 plan-year testing. Two catch-up figures are determined the same way: the Roth catch-up wage threshold, tested against 2026 FICA wages, reaches $155,000, and the age 60-63 super catch-up $11,750 (Roth catch-up wage threshold 2027). Small employers that run a SIMPLE IRA instead of a 401(k) have their own set of limits, $17,500 or $19,100 depending on company size, in our SIMPLE IRA limits 2027 projection.
The official 2026 limits, in one place
Everything above projects 2027. The 2026 figures are different: they are final, set by IRS Notice 2025-67 for the plan and IRA limits and by IRS Revenue Procedure 2025-19 for health savings accounts, and they are the numbers that govern contributions made this year. Nothing in this section is a projection, and none of it carries over to 2027 unless the 2027 table near the top says so.
| Account or limit | Official 2026 figure |
|---|---|
| 401(k), 403(b) and governmental 457(b) elective deferral | $24,500 |
| Catch-up, age 50 and older | $8,000 (combined $32,500) |
| SECURE 2.0 catch-up, ages 60 through 63 | $11,250 instead of $8,000 (combined $35,750) |
| Total additions to a defined contribution plan, section 415(c) | $72,000 |
| Compensation that can be counted, section 401(a)(17) | $360,000 |
| Traditional or Roth IRA contribution | $7,500 |
| IRA catch-up, age 50 and older | $1,100 (combined $8,600) |
| HSA, self-only coverage | $4,400 |
| HSA, family coverage | $8,750 |
| HSA catch-up, age 55 and older | $1,000 |
| SIMPLE IRA and SIMPLE 401(k) deferral | $17,000 |
| SIMPLE catch-up, age 50 and older | $4,000 |
Three details deserve a sentence each. The $11,250 enhanced catch-up replaces the standard one rather than adding to it, and it applies only in the calendar years a worker turns 60, 61, 62 or 63. The HSA catch-up starts at 55, not 50, and it is a statutory amount that does not adjust for inflation. And the IRA limit is per person across every traditional and Roth IRA combined, not per account.
Self-employed savers sit on the same ladder. A SEP-IRA takes employer contributions of up to 25% of compensation, which for a self-employed owner works out to 20% of net self-employment earnings after the deduction for half of self-employment tax (the rate table in IRS Publication 560 does this conversion), tops out at the total additions limit, allows no catch-up, and needs only Form 5305-SEP. A solo 401(k) combines the employee deferral with a profit-sharing contribution figured the same way (effectively 20% of net self-employment earnings for a sole proprietor), with the combined total capped at the same additions limit plus any catch-up.
One 2026 rule changes how catch-ups are taxed. Employees whose prior-year FICA wages from the employer exceeded $150,000 must make catch-up contributions on a Roth, after-tax basis; pre-tax catch-ups are no longer allowed for them. The wage threshold for the 2027 plan year is covered in the Roth catch-up wage threshold guide.
2026 IRA income ranges
| Filing status | Range |
|---|---|
| Traditional IRA deduction, single or head of household, covered by a workplace plan | $81,000 to $91,000 |
| Traditional IRA deduction, married filing jointly, contributor covered | $129,000 to $149,000 |
| Traditional IRA deduction, married filing jointly, only the spouse covered | $242,000 to $252,000 |
| Traditional IRA deduction, married filing separately, covered | $0 to $10,000 |
| Roth IRA contribution, single or head of household | $153,000 to $168,000 |
| Roth IRA contribution, married filing jointly | $242,000 to $252,000 |
| Roth IRA contribution, married filing separately | $0 to $10,000 |
Above the top of the traditional range the contribution is still allowed, just not deductible, which is the first step of the backdoor Roth IRA. Above the top of the Roth range, direct contributions are barred.
What the 2026 limits add up to
The limits apply independently by account type, so a household can shelter far more than any single figure suggests. Take a married couple in 2026 where both work, both have 401(k) plans, and they carry family high-deductible coverage. Spouse A is 56 and Spouse B is 52, so both qualify for the age-50 catch-ups but only Spouse A for the HSA catch-up.
- Each spouse’s 401(k): $24,500 plus $8,000 catch-up, or $32,500 apiece, $65,000 together.
- Each spouse’s backdoor Roth IRA: $7,500 plus $1,100 catch-up, or $8,600 apiece, $17,200 together.
- Family HSA: $8,750 plus Spouse A’s $1,000 catch-up, or $9,750.
That is $65,000 + $17,200 + $9,750 = $91,950 of tax-advantaged saving before any employer match or after-tax plan contributions.
Two mistakes turn those limits into penalties. The first is treating each IRA as having its own ceiling: contributing $7,500 to a traditional IRA and another $7,500 to a Roth IRA in the same year leaves a $7,500 excess, taxed at 6% a year (that is $450 a year) until it is withdrawn or recharacterized by the filing deadline, extensions included. The second is assuming the employer match eats into the employee’s deferral room. It does not; it counts against the $72,000 additions ceiling instead. An employee who defers $24,500 and receives a $10,000 match has used $34,500 of that ceiling, leaving $37,500 for further employer money or after-tax contributions where the plan allows them. Workers who change jobs mid-year should remember that the deferral limit applies across all employers combined, and an excess deferral has to be corrected by April 15 of the following year to avoid being taxed twice.
The calendar: the last print is in, the IRS speaks next
The three CPI-U releases that matter arrived on schedule: July’s on August 12 (333.918), August’s on September 11 (334.980) and September’s on October 14 (336.940). With that last figure the Q3 2026 average is fixed at 335.279, and the 2027 401(k) and catch-up limits are determined, weeks before the IRS makes anything official.
The IRS itself confirms the figures in its annual Notice, usually in November, the way Notice 2025-67 set the 2026 figures in November 2025. Expect a Notice this month or next restating what the arithmetic above has already settled.
The verdict on our own forecast: in August the honest framing was a coin flip for the 401(k) deferral and catch-up, decided by whether September cleared 335.122. It cleared it by a wide margin, so $25,500 and $8,500 it is. The IRA’s rise to $8,000 did not hold up: run on the index its own statute names, the IRA limit stays at $7,500. The formula reproduced the IRS’s own 2026 numbers exactly and has now been handed its last input; only the November Notice makes the figures official. See the 2027 health FSA projection for how the same kind of forecast plays out on a smaller, faster-moving cap.
Correction, November 11, 2026: An earlier version of this page projected the 2027 IRA contribution limit at $8,000 using the third-quarter CPI average. The IRA limit is indexed under section 1(f)(3) instead, on the same August window as the tax brackets, and that method points to $7,500.
Sources
- IRS Notice 2025-67, the 2026 pension plan and IRA limits (401(k) $24,500, IRA $7,500, section 415(c) $72,000, section 401(a)(17) $360,000, SIMPLE $17,000). irs.gov/pub/irs-drop/n-25-67.pdf
- IRS Revenue Procedure 2025-19, the 2026 HSA contribution limits ($4,400 self-only, $8,750 family). irs.gov/pub/irs-drop/rp-25-19.pdf
- SECURE 2.0 Act of 2022, the enhanced catch-up for ages 60 through 63 (section 109) and the Roth catch-up requirement for higher earners (section 603). congress.gov/bill/117th-congress/house-bill/2617
- IRS Publication 590-A, IRA contribution rules and worksheets. irs.gov/pub/irs-pdf/p590a.pdf
Quick answers
What will the 401(k) contribution limit be in 2027?
The 2027 401(k) limit is $25,500, determined by the statutory formula in 26 U.S.C. 402(g)(4) now that the third-quarter CPI-U average is closed at 335.279. September came in at 336.940, above the 335.122 it needed, which lifted the confirmed 2026 limit of $24,500 to $25,500 rather than $25,000. The IRS confirms the official figure in its annual Notice, usually in November.
What will the IRA contribution limit be in 2027?
The IRA limit in 2027 stays at $7,500, the same as the confirmed 2026 limit. It is not indexed to the third-quarter CPI-U: 26 U.S.C. 219(b)(5)(C) applies the section 1(f)(3) cost-of-living adjustment, which uses the chained CPI-U averaged over the 12 months ending August 31. That average for September 2025 through August 2026 gives $7,831 before rounding, which rounds down to $7,500; reaching $8,000 would have required an average of about 186.79 against the actual 182.857. The IRS confirms it in its annual Notice, usually in November.
When does the IRS announce the official 2027 limits?
The IRS typically publishes retirement contribution limits for the next year in a Notice issued in November. The 2026 limits, for example, were set in Notice 2025-67, published in November 2025. Following that pattern, the official 2027 limits for the 401(k), IRA, and catch-up contributions should arrive in a similar Notice in November 2026. The inflation data it needs is already complete: the September CPI-U was published October 14.
How are 401(k) contribution limits calculated?
The 401(k) elective deferral limit is indexed under 26 U.S.C. 402(g)(4) using CPI-U, the Bureau of Labor Statistics urban consumer price index, averaged over July, August, and September and compared with the same three-month average from 2005. The result is rounded down to the next lowest multiple of $500. Applying this formula to 2025 data reproduces the confirmed 2026 limit of $24,500 exactly, which is why the same method can be used to project 2027.
What are the official 2026 HSA, SIMPLE and catch-up limits?
For 2026 the HSA limit is $4,400 for self-only coverage and $8,750 for family coverage, plus a $1,000 catch-up from age 55. The SIMPLE IRA deferral limit is $17,000 with a $4,000 catch-up from age 50. The 401(k) catch-up is $8,000 from age 50, or $11,250 instead for ages 60 through 63, and the IRA catch-up is $1,100. These are final figures from IRS Notice 2025-67 and Revenue Procedure 2025-19, not projections.
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