Show Notes
Derek Wu turns the projected 2027 401(k) contribution limit into a single 10-minute task: divide the limit by your number of pay periods, convert it to a percentage of gross pay, and set it once. The episode also covers how to check whether the Roth-only catch-up rule applies to you if you are 50 or older.
The 2027 limit and catch-up amount are projected, not official. The IRS usually posts the figures in late October or November, and taxpayers.net calculates its projection from September CPI. Because payroll only knows the percentage you type in, you can set your rate now and adjust later if the official number differs. This episode walks through how to do that without waiting.
- Projected, not official: Why you can act on the 2027 estimate now and revise it once the IRS publishes the final figure.
- Limit divided by pay periods: How to turn the annual limit into a percentage of gross pay, with a labeled hypothetical for 26 pay periods and notes for monthly and weekly schedules.
- Where to check: Which fields to look at on your pay stub and plan site, why to review before saving, how plan caps can affect your rate, and how to confirm the change on your next pay stub.
- Roth-only catch-up: If you are 50 or older and had more than $150,000 in prior-year FICA wages (W-2 Box 3), catch-up contributions must be Roth, and if your plan has no Roth option, you cannot make catch-up contributions. The final regulations apply in 2027.
- Quick 50+ checklist: Check W-2 Box 3, confirm your plan lists Roth, and email your plan administrator if it does not.
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