The IRS raised the 2027 deferral limit for 401(k) plans to $25,500, up from $24,500. It announced the change in news release IR-2026-136 on November 12, 2026.
The IRA limit stays at $7,500 for another year. The agency posted the full figures in Notice 2026-66 that same day.
For self-employed workers, these numbers set the ceiling on how much income they can shelter next year. A sole proprietor with a solo 401(k) acts as both the employee and the employer. So the new deferral limit and the higher overall cap both apply.
What The 2027 Limits Actually Say
Savers aged 50 and older can add an $8,500 catch-up in 2027, up from $8,000. That lifts their total deferral to $34,000. Savers aged 60 through 63 get a larger catch-up of $11,750, up from $11,250.
Notice 2026-66 also raises the overall cap on defined contribution plans to $75,000 from $72,000. This section 415(c) figure limits the combined employee and employer money in a solo 401(k) or SEP-IRA. The pay that plans can count toward contributions rises to $375,000 from $360,000.
SIMPLE IRA deferrals climb to $17,500 from $17,000. The IRA catch-up for savers 50 and older holds at $1,100. The minimum pay that triggers SEP coverage for a worker stays at $800.
Why This Matters For Self-Employed Savers
A freelancer without an employer plan must save for retirement on their own. The higher 415(c) cap gives top earners $3,000 more room in a SEP-IRA or solo 401(k). Money that goes into those accounts also trims taxable income for the year.
The income ranges for IRA deductions and Roth eligibility also moved up. Single filers can contribute the full amount to a Roth IRA until modified AGI hits $158,000, and eligibility phases out at $173,000. For married couples filing jointly, the Roth range now runs from $250,000 to $260,000.
Traditional IRA deductions shift too. A single filer covered by a workplace plan, such as a solo 401(k), now loses the deduction between $83,000 and $93,000. In 2026, that range ran from $81,000 to $91,000.
One change targets older high earners. The notice sets the Roth catch-up wage threshold at $155,000, up from $150,000. Plans use this number to decide who must make catch-up contributions on a Roth basis.
What Self-Employed Savers Should Do Next
Start by checking which plan fits your 2027 income. A solo 401(k) often lets low- and middle-income earners save more because the full $25,500 deferral counts before any employer share.
A SEP-IRA is simpler to run. Its contributions depend only on a percentage of net earnings.
Next, revisit your quarterly estimated tax plan. Bigger planned contributions can lower the tax you owe each quarter. Talk with a tax professional before you cut payments, because underpayment penalties still apply.
Finally, remember that the 2026 limits still govern this year. You can generally contribute up to your tax filing deadline. That leaves time to top up.
What To Watch Next
Plan providers will now load the 2027 figures into their systems and online calculators. Check that your provider shows the new limits before you set up automatic contributions in January. A stale cap could leave money on the table.
The notice also flags a bigger shift for lower earners. For tax years after December 31, 2026, the new Saver’s Match replaces the Saver’s Credit for most retirement contributions. Pair these limits with the 2027 tax brackets and standard deduction to map out next year’s tax bill.
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