The 401(k) contribution limit for 2027 is almost certainly going to be $25,500, and the IRS will probably confirm it within the next two weeks. That’s the headline every retirement site is running right now. What none of them mention is that the women most determined to hit that number are the ones most likely to quietly give back part of their employer match, because they hit it too early. The limit is the easy part. The shape of your contributions across the year is where the money goes missing.
Retirement actuaries at Milliman, using the third-quarter inflation data, projected in October that the 2027 employee deferral limit will rise $1,000 from this year’s $24,500, according to 401(k) Specialist’s October 20 report. The standard catch-up for anyone 50 or older is projected to go from $8,000 to $8,500, and the special catch-up for ages 60 through 63 from $11,250 to $11,750. The IRS published last year’s numbers on November 13, 2025 (release IR-2025-111), so the official 2027 announcement should land any day. Open enrollment is happening right now too, which is exactly when most of us pick a new contribution rate for January.
Why maxing out your 401(k) early can cost you match money
Most employers don’t match your contributions once a year. They match them paycheck by paycheck. If your plan matches 50 cents per dollar on the first 6% of pay (the single most common formula in Vanguard’s How America Saves 2026 report), the match on any given paycheck depends on what you put in from that paycheck. Contribute nothing on a payday and you get nothing that payday.
So picture what happens when you set an aggressive rate in January. You reach the annual cap in, say, September. Payroll stops your deferrals because the law requires it. And because you aren’t contributing anymore, the per-paycheck match stops too. Your employer’s formula was promised as a percentage of a full year of pay, and you just collected it on nine months.
The fix for this problem is called a true-up: a once-a-year catch-up contribution, usually paid in the first quarter of the following year, that tops your match back up to what the full-year formula would have given you. Some plans have one. Plenty don’t. The most recent widely cited benchmark, a Deloitte survey reported by PLANSPONSOR, found 54% of plan sponsors offered a true-up. That figure dates to 2017, and nobody has published a better one since, which tells you how little attention this gets. Flip it around and roughly half of plans may not make you whole.
A 30% election on a $120,000 salary forfeits $969 of match
Say you earn $120,000, you’re paid every other Friday (26 paychecks), and your employer uses that common 50%-of-6% formula. Each gross paycheck is $4,615.38. The full match on each one is 3% of pay, or $138.46, which adds up to $3,600 over the year.
To reach a $25,500 limit evenly, you’d divide it by 26 and get $980.77 per paycheck. That’s 21.25% of your pay. Every single check includes at least 6% from you, so you collect all 26 matches and the full $3,600.
Now say you’re impatient and elect 30% instead. That’s $1,384.62 per check. After 18 paychecks you’ve put in $24,923.08, and the 19th check tops you off with a partial $576.92. That partial contribution is still 12.5% of that check’s pay, so you get the match on it. Then the last seven paychecks of the year carry no deferral at all. Seven times $138.46 is $969.23 in match you never receive. In a plan without a true-up, that money is simply gone, and you won’t see a line item telling you so. Your statement just looks a little light.
There’s also a rounding catch. Many payroll systems only accept whole percentages. At 21% you’d contribute $969.23 per check and finish the year at $25,200, $300 under the cap. At 22% you’d hit the limit one check early, and the 26th paycheck would carry only $115.38 of your money. That’s 2.5% of pay, so the match on it shrinks from $138.46 to $57.69, an $80.77 loss. Small, sure, but it repeats every year you leave the rate on autopilot, and it gets bigger every time your salary or the limit moves and the math shifts under you.
The two questions to ask HR before you set your rate
The first question is whether your plan has a true-up provision. Ask it in exactly those words. If the answer is yes, front-loading is fine, and some people prefer it because the money gets invested sooner. If the answer is no, or “I’ll have to check,” spread your contributions so you hit the limit on your final paycheck of the year.
The second question is whether your contribution percentage applies to bonuses. If you’re expecting a March bonus and your election hits it at 22%, you can reach the cap well before December even with a carefully calculated rate. If bonuses are included, run the math on salary plus bonus and divide by your actual number of paychecks. Some plans let you set a separate, lower rate for bonus pay, which is the cleanest way around it.
A third thing to check if you’re 50 or older: under the SECURE 2.0 rule that took effect in January 2026, if your prior-year FICA wages topped the threshold (currently $150,000, projected to rise to $155,000), your catch-up dollars have to go in as Roth, after tax. It doesn’t change the match math, but it changes your take-home pay, so factor it into your rate before you assume the full catch-up fits your budget. If you’re weighing Roth against traditional more broadly, our Roth IRA vs 401(k) explainer walks through the trade-offs.
Most of us aren’t maxing out, and that’s okay
A bit of perspective helps here. Only 14% of participants in Vanguard’s plans contributed the statutory maximum in 2025, and the figure was 14% for women and 15% for men. The average actual deferral rate was 7.6%. So if a 21.25% contribution rate sounds like a fantasy, you have plenty of company.
The match math matters at every level, though, not just at the cap. The same per-paycheck logic means that if you’re contributing below 6% in that common formula, you’re leaving part of the match uncollected on every check. For most people the higher-impact move is reaching the full match rate first, then raising your rate by a point or two each January, which is a lot easier to do if you pair it with a raise. If you’re also choosing a health plan this month, the HSA side of the decision (our HDHP vs PPO breakdown has the details) competes for the same paycheck dollars.
I’m not going to tell you what to invest in or promise what any of this grows into. The point is narrower than that. The 401(k) contribution limit for 2027 will be a nice, round, widely reported number. The thing that actually decides whether you capture every dollar your employer offered is a boring plan-document detail and a division problem you can do on your phone in the HR portal. Divide the limit by your number of paychecks, convert it to a percentage of each check, and ask about the true-up before you click save.