2027 IRA and 401(k) contribution limits
For 2027, you can contribute up to $7,500 across all your IRAs, or $8,600 if you’re 50 or older. The 401(k) limit is $25,500, plus an $8,500 catch-up at 50 or older. Roth IRA eligibility phases out at higher incomes, and SEP and SIMPLE IRAs have their own limits.
This article is educational and is not personalized tax or investment advice. Figures are set by the IRS and confirmed against IRS.gov.
2027 contribution limits at a glance
| Account | 2027 | 2026 |
| IRA, Traditional and Roth combined | $7,500 | $7,500 |
| IRA, age 50 or older | $8,600 | $8,600 |
| 401(k), 403(b), governmental 457 and Thrift Savings Plan: employee deferral | $25,500 | $24,500 |
| 401(k) catch-up, age 50 or older | $8,500 | $8,000 |
| 401(k) catch-up, ages 60–63 | $11,750 | $11,250 |
| Total defined-contribution limit (employee + employer) | $75,000 | $72,000 |
| SEP IRA | Lesser of 25% of compensation or $75,000 | Lesser of 25% of compensation or $72,000 |
| SIMPLE IRA: employee deferral | $17,500 (or $19,100 at some employers) | $17,000 (or $18,100 at some employers) |
Sources: IRS cost-of-living announcement for 2027 · IRS: IRA contribution limits. The 2026 figures are from the IRS 2026 announcement and Notice 2025-67.
How much can you contribute to an IRA in 2027?
For 2027, the IRA limit is $7,500, or $8,600 if you’re 50 or older. That’s a combined limit across every Traditional and Roth IRA you own, not a limit per account; see How many IRAs can you have? You also can’t contribute more than your taxable compensation for the year, such as wages or self-employment income.
The age-50 catch-up is now indexed to inflation rather than fixed at $1,000, so it can rise in some years. For 2027 it’s $1,100.
You can split the limit between a Traditional and a Roth IRA however you like, as long as the total stays within it. For how the two accounts differ, see Traditional IRA vs Roth IRA.
What are the Roth IRA income limits for 2027?
Your ability to contribute to a Roth IRA phases out as your modified adjusted gross income (MAGI) rises. Inside the range you can make a reduced contribution; above it, you can’t contribute directly.
| Filing status | 2027 phase-out range | 2026 phase-out range |
| Single or head of household | $158,000–$173,000 | $153,000–$168,000 |
| Married filing jointly | $250,000–$260,000 | $242,000–$252,000 |
| Married filing separately (lived with spouse) | $0–$10,000 | $0–$10,000 |
The married-filing-separately range isn’t adjusted for inflation. Some higher earners above these ranges use a backdoor Roth IRA, which comes with its own tax rules. For the basics of the account, see What is a Roth IRA?
Can you deduct Traditional IRA contributions in 2027?
Anyone with taxable compensation can contribute to a Traditional IRA. Whether you can deduct it depends on your income, but only if you or your spouse is covered by a workplace retirement plan. If neither of you is covered, the contribution is generally fully deductible.
| Situation | 2027 deduction phase-out | 2026 deduction phase-out |
| Single or head of household, covered by a workplace plan | $83,000–$93,000 | $81,000–$91,000 |
| Married filing jointly, you’re covered | $133,000–$153,000 | $129,000–$149,000 |
| Married filing jointly, only your spouse is covered | $250,000–$260,000 | $242,000–$252,000 |
| Married filing separately, covered by a workplace plan | $0–$10,000 | $0–$10,000 |
More on how the account works: What is a Traditional IRA?
What are the 401(k) contribution limits for 2027?
For 2027, you can defer up to $25,500 of your salary into a 401(k). The same limit applies to 403(b) plans, governmental 457 plans and the federal Thrift Savings Plan. Two catch-up amounts apply on top of it:
- Age 50 or older: an extra $8,500.
- Ages 60 through 63: a higher catch-up of $11,750 in place of the standard one, under SECURE 2.0, the 2022 federal retirement law.
The total that can go into your account from all sources, including employer contributions, is capped at $75,000, not counting catch-ups. Your plan’s own rules may set lower limits, so check with your plan administrator.
Contributing to a 401(k) doesn’t reduce your IRA limit. It can, however, affect whether a Traditional IRA contribution is deductible (see the table above).
What are the SEP IRA and SIMPLE IRA limits for 2027?
SEP IRA. An employer, including a self-employed person, can contribute the lesser of 25% of compensation or $75,000. Only the first $375,000 of compensation counts. SEP IRAs don’t allow catch-up contributions.
If you’re self-employed, the effective rate works out closer to 20% of net self-employment earnings, because the contribution and half of self-employment tax both reduce the base. The exact math is in IRS Publication 560. For more, see What is a SEP IRA?
SIMPLE IRA. Employees can defer up to $17,500, or $19,100 at employers with 25 or fewer employees, or with up to 100 that elect the higher limit. Catch-up amounts also apply at 50 and older and vary by plan; check the IRS SIMPLE IRA page or your plan administrator. For how the plan works, see What is a SIMPLE IRA?
When is the deadline to contribute?
| Account | Deadline for 2027 contributions |
| Traditional and Roth IRA | Your federal tax filing deadline, in April 2028 (extensions don’t apply) |
| SEP IRA | Your business’s tax filing deadline, including extensions |
| 401(k), 403(b), 457 employee deferrals | Generally December 31, 2027, through payroll |
So from January 1 until the filing deadline, you can still make Traditional and Roth IRA contributions for the prior year. 401(k), 403(b) and 457 deferrals can’t be made for a prior year.
What happens if you contribute too much?
An IRA contribution above the limit is an excess contribution. The IRS charges a 6% excise tax on the excess for each year it stays in the account.
You can generally avoid the tax by withdrawing the excess, along with any earnings on it, before your tax filing deadline, including extensions. The earnings are taxable and may also be subject to a 10% early-withdrawal penalty if you’re under 59½. See IRS Publication 590-A for the rules, and consider a tax professional for your situation.
The M1 bottom line
M1 offers Traditional, Roth and SEP IRAs, with SEP IRAs available to self-employed individuals only. M1 doesn’t offer 401(k), 403(b) or SIMPLE plans, which are set up through an employer, but you can roll an old employer plan into an M1 IRA. A SIMPLE IRA generally needs to be held for two years before it can move to a Traditional IRA without a higher penalty.
Between January 1 and the tax filing deadline, you choose whether a Traditional or Roth IRA deposit counts toward the current or the prior tax year. If you pick the wrong year, you can ask M1 to change it by April 15. SEP IRA deposits are reported for the calendar year they’re made, and that year can’t be changed at M1. The tax year you deduct a SEP contribution for is set on your business’s tax return, so a tax professional can help with prior-year SEP contributions.
If you automate contributions with Smart Transfers, transfers into your IRA pause once you reach the annual IRS limit, which can help keep a recurring deposit from going over it. M1 doesn’t track contributions you make to IRAs at other institutions, and your own limit may be lower than the annual maximum if your compensation or income limits it, so keeping the total is up to you. If you do go over, you can remove the excess in the app, entering the earnings on it yourself.
You can open an IRA at M1 with $500, then add as little as $10 at a time.
Investing involves risk, including the possible loss of principal. M1 does not provide tax advice.
Frequently asked questions
Yes. The IRA and 401(k) limits are separate. If you’re covered by a workplace plan, though, your Traditional IRA contribution may not be fully deductible, depending on your income.
No. A qualifying rollover from an old 401(k) or another IRA doesn’t count toward the annual limit, which applies only to new contributions. An ineligible rollover, such as a second indirect IRA-to-IRA rollover within 12 months, can be treated as an excess contribution. See What is a rollover IRA?
Yes. Between January 1 and the tax filing deadline, you can still make Traditional and Roth IRA contributions for the prior year. For 2026 contributions, the deadline is April 15, 2027. Extensions don’t apply.
This content is for informational and educational purposes only and does not constitute investment, tax or legal advice. Contribution limits, income ranges and deadlines are set by the IRS and may change; confirm current figures at IRS.gov. M1 does not provide tax or legal advice; consult a qualified professional about your situation. Brokerage products and IRAs are offered by M1 Finance LLC, member FINRA/SIPC. Use of the M1 platform is subject to a $3 monthly platform fee, waived in any billing cycle in which total M1 assets reach $10,000 on at least one day; other fees may apply. See the M1 Fee Schedule and the Platform Fee Disclosure. Investing involves risk, including the possible loss of principal.
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