The Horizon
The quarter that sets next year's retirement limits closes on September 30. Almost no financial coverage will mark the date.
Prices are being collected right now for the last of the three months that count. The other two are already printed.
A trader has no use for this. A builder fifteen years out has one, because that quarter decides how much of next year's income you are allowed to shelter.
The Event
Milliman published its near-final projection of the 2027 retirement plan limits on September 15. The Plan Sponsor Council of America carried the figures the following day.
The elective deferral limit for 401(k), 403(b) and 457 plans is projected at $25,500, up from $24,500. The age 50 catch-up is projected at $8,500, up from $8,000, and the catch-up for ages 60 through 63 at $11,750, up from $11,250.
The total annual addition limit under section 415(c) is projected at $75,000 against $72,000 this year. The compensation limit under section 401(a)(17) is projected at $375,000, up from $360,000.
The highly compensated employee threshold is projected at $170,000, up from $160,000. The wage threshold that forces catch-up contributions into Roth dollars is projected at $155,000, up from $150,000.
Every 2026 figure above comes from IRS Notice 2025-67, published November 13, 2025. Treasury Regulation 1.415(d)-1 ties the adjustment to the consumer price index for the calendar quarter ending September 30, measured against the same quarter of 2001.
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Washington Is Betting More Than the Company Is Worth
Here's a number that shouldn't be possible.
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One of those valuations is wrong. The papers get signed in the second half of this year. After that, the market does the correcting.
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The Path
Start with the room itself. A builder over 50 who fills both the deferral and the catch-up shelters $32,500 in 2026, and the projection puts 2027 at $34,000.
Between ages 60 and 63 those two lines come to $35,750 this year and a projected $37,250 next. Neither figure carries forward, because an unused year of contribution room is gone when the year ends.
The self-employed ceiling moves further. Section 415(c) caps everything landing in a defined contribution account in a single year, employer and profit-sharing dollars included, and $75,000 against $72,000 is $3,000 of additional capacity.
The part that is not obvious is that these limits do not track inflation. They move in steps, and the regulation rounds every step down.
The defined benefit limit rounds down to the nearest $5,000 and the section 415(c) limit to the nearest $1,000, while deferrals move in increments of $500. In its July forecast Milliman ran the calculation two ways, against actual inflation and against a projected quarter, and both versions produced the same table.
That is the finding worth having. The steps are wide enough that one month of price data cannot move these numbers, so the 2027 limits are settled in September rather than in November.
A builder can set next year's payroll deferral election now. The notice the IRS publishes in November will confirm a figure that was already usable.
The last consequence reaches past the retirement account, into the tax return and the payroll file. Catch-up contributions must be made in Roth dollars once prior-year wages from the employer cross the threshold, which is $150,000 this year and a projected $155,000 next.
A builder whose wages sit between those two figures keeps the pre-tax option for another year. The same $8,500 either reduces taxable income or does not, decided by which side of a rounded threshold a W-2 landed on.
For an owner the highly compensated employee threshold does separate work. Moving from $160,000 to $170,000 reclassifies part of a payroll, and nondiscrimination testing is what sets how much the owner may defer into his own plan.
The Watch
The September consumer price index arrives October 14 at 8:30 a.m. Eastern and completes the measurement quarter. It is the last input, and on the projection above it is not a decisive one.
The IRS confirms the figures by notice, typically in the middle of November. Last year's arrived on November 13 as Notice 2025-67, which also set the IRA limit at $7,500 with an $1,100 catch-up, a pair the September projection does not cover.
The threshold worth watching is not in the price index but on the W-2. A builder near $150,000 in employer wages this year should know the figure before December, because it decides whether his 2027 catch-up is pre-tax or Roth.
The 2027 limits are knowable now, and the open question has moved from what the room will be to how much of it gets used.