IRS raises 401(k) contribution limit by $1,000 for 2027 as retirement savings caps increase
Higher 401(k) contribution cap
The IRS increased the maximum 401(k) contribution for 2027 to $25,500. The 2026 limit was $24,500, making the increase $1,000. The agency said the new adjustment provides taxpayers and employers with information for retirement planning decisions for the coming year. The change reflects an inflation adjustment.
Catch-up limits rise
For workers aged 50 and over in most 401(k), 403(b), governmental 457 plans and the federal government’s Thrift Savings Plan, the catch-up limit rises to $8,500. That is $500 more than the 2026 limit of $8,000.
Workers aged 60 to 63 in those plans can contribute up to $11,750 under a change made by the SECURE 2.0 Act of 2022. The article gives this limit without further detail.
IRA limits stay the same
The annual contribution limit for Individual Retirement Accounts remains $7,500. The IRA catch-up limit for individuals aged 50 and over remains $1,100. The IRS also said income ranges used to determine eligibility for deductible traditional IRA contributions, Roth IRA contributions and the Saver’s Credit increased for 2027.
Key points
- The 2027 401(k) contribution limit is $25,500, up $1,000 from 2026.
- The catch-up limit for many plan participants aged 50 and over rises to $8,500.
- Workers aged 60 to 63 in eligible plans can contribute up to $11,750.
- IRA contribution and age-50-and-over catch-up limits remain $7,500 and $1,100, respectively.