IRS Raises 2027 401(k) Contribution Limit to $25,500 From $24,500
The IRS raised the 2027 401(k) employee deferral limit to $25,500 from $24,500. The IRA cap stays at $7,500, catch-up limits rise for older savers, and income thresholds for Roth IRAs and the Saver's Credit move higher.
The Internal Revenue Service (IRS) raised the 2027 401(k) contribution limit to $25,500, up from $24,500 in 2026, in an announcement on Thursday, November 12, 2026. The IRS boosts 401(k) limit for workers in 401(k), 403(b) and most 457 plans, as well as the federal Thrift Savings Plan.
The limit for individual retirement accounts (IRAs) does not change. It stays at $7,500 for 2027.
Catch-up limits for older savers
Workers 50 and older can add a catch-up contribution of $8,500 in 2027, up from $8,000. That brings their total to $34,000.
Savers aged 60 to 63 get a larger catch-up under the Secure 2.0 retirement law. Their extra amount rises to $11,750 from $11,250, which allows up to $37,250 in a 401(k). The IRA catch-up for savers 50 and older stays at $1,100.
Workers with a SIMPLE IRA, a plan offered by some small employers, can contribute $17,500, up from $17,000. Employer matching contributions do not count toward these limits.
Higher income thresholds
More people will be able to deduct traditional IRA contributions if they are covered by a workplace plan. For single filers, the deduction phase-out range moves to $83,000–$93,000, from $81,000–$91,000. For married couples filing jointly, it rises to $133,000–$153,000, from $129,000–$149,000.
Roth IRA limits also climb. Single filers can make a full contribution with income below $158,000, up from $153,000, and eligibility ends at $173,000. For married couples filing jointly, the phase-out range goes to $250,000–$260,000, from $242,000–$252,000.
The Saver's Credit, a tax credit for low- and moderate-income workers who contribute to retirement accounts, also expands. Married couples filing jointly qualify with income up to $83,000, from $80,500. Heads of household can earn up to $62,250, from $60,375, and single filers up to $41,500, from $40,250.
Social Security and how Americans save
Social Security benefits will rise 3.6% starting in January, the largest increase since 2023. The average retired worker's monthly check will grow from $2,095 to $2,170.
Few savers reach the cap. In 2025, only 14% of participants maxed out their 401(k)s, according to Vanguard's 2026 How America Saves report. About 19% of employees in the second quarter of 2026 were not deferring enough to get their company's full match, according to a Fidelity analysis.
"Before worrying about contribution limits, make sure you're capturing your full employer match," said Sean Michael Pearson, a certified financial planner with Ameriprise Financial Services in Conshohocken, Pennsylvania.
Experts advise anyone planning to max out a 401(k) in 2027 to change their savings rate in December. That way it is active by the first January paycheck, though the update can take one or two pay periods.
