IRS raises 401(k) limits to $25,500 for 2027

401(k) limit rises to $25,500

The IRS announced that employees can defer $25,500 into workplace 401(k) plans in 2027, up from $24,500 in 2026. The increase applies to 401(k)s, 403(b)s and most 457 plans.

Catch-up limits for workers 50 and older

The 401(k) catch-up contribution limit rises to $8,500 for savers 50 and older in 2027, up from $8,000 in 2026. Both amounts are in addition to the $25,500 deferral limit.

New option for workers aged 60 to 63

Investors aged 60 to 63 can save an extra $11,750 in 2027 based on changes enacted via Secure 2.0, up $500 from 2026. This is in addition to the standard $25,500 deferral limit.

IRA limits unchanged for 2027

The 2027 IRA contribution limit remains $7,500, unchanged from 2026. IRA catch-up contributions for investors age 50 and older will be $1,100, the same as 2026.

Most workers don't max out contributions

Only 14% of 401(k) participants maxed out their accounts in 2025, according to Vanguard's 2026 How America Saves report. The average combined savings rate, including employer deposits, was 12.1%.

Capture employer match before maximizing

Sean Michael Pearson, a certified financial planner with Ameriprise Financial Services in Conshohocken, Pennsylvania, says to secure your full employer match before worrying about contribution limits.

“Before worrying about contribution limits, make sure you're capturing your full employer match.”