The Internal Revenue Service has announced cost-of-living adjustments affecting certain dollar limitations for pension plans and other retirement-related limitations for 2027 in Notice 2026-66.
The following chart details 2027 retirement plan dollar limitation cost-of-living adjustments:
| Limitation Description | 2026 | 2027 |
| Maximum annual benefit under a defined benefit plan under IRC Section 415(b)(1)(A) | $290,000 | $300,000 |
| Maximum annual contribution to an individual’s defined contribution plan account under IRC Section 415(c) | $72,000
(plus catch-up) |
$75,000
(plus catch-up) |
| Elective contribution limit under IRC Section 402(g)(1) (for 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan) | $24,500 | $25,500 |
| Maximum amount of annual compensation that may be taken into account for determining benefits or contributions to retirement plans under IRC Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) | $360,000 | $375,000 |
| Dollar amount for determining maximum account balance in an employee stock ownership plan subject to a 5-year distribution period under IRC Section 409(o)(1)(C)(ii) | $1,455,000 | $1,505,000 |
| Dollar amount used for determining the lengthening of the 5-year distribution period in an employee stock ownership plan under IRC Section 409(o)(1)(C)(ii) | $290,000 | $300,000 |
| Amount of compensation to be a “key” employee under a “top-heavy” plan under IRC Section 416(i)(1)(A)(i) | $235,000 | $245,000 |
| Dollar limitation used in the definition of “highly compensated employee” under IRC Section 414(q)(1)(B) | $160,000 | $170,000 |
| Limitation under IRC Section 408(p)(2)(E) for salary deferral contributions to SIMPLE retirement accounts | $17,000 (general limit)
$18,100 (eligible employers)* |
$17,500 (general limit)
$19,100 (eligible employers)* |
| Limitation concerning the qualified gratuitous transfer of qualified employer securities to an employee stock ownership plan under IRC Section 664(g)(7) | $65,000 | $65,000
(No Adjustment) |
| Catch-up contribution limit for employees who are age 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan | $8,000 | $8,500** |
| Minimum compensation amount under IRC Section 408(k)(2)(C) for simplified employee pensions (SEPs) | $800 | $800
(No Adjustment) |
| IRA contribution limit | $7,500 | $7,500
(No Adjustment) |
| IRA catch-up contribution limit for individuals who are age 50 and over | $1,100 | $1,100
(No Adjustment) |
| Wage Base For Social Security Tax | $184,500 | $192,300*** |
*Eligible employers are those with 25 or fewer employees who received at least $5,000 in compensation in the prior year, which receive the higher limit automatically. Employers with 26 to 100 such employees may elect the higher limit if they provide a 4% matching contribution or a 3% nonelective contribution.
**The SECURE 2.0 Act provided increased catch-up contributions for individuals age 60 to 63. This limit increases from $11,250 for 2026 to $11,750 for 2027.
***October 14, 2026 SSA announcement