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Employees Will Be Able to Contribute More to 401(k)s in 2027, IRS Says
The new cap applies to 401(k), 403(b) and most 457 plans, while the IRA limit remains unchanged and catch-up amounts rise for older savers.
- The IRS announced new 2027 retirement contribution limits on Thursday, raising the 401 employee deferral cap to $25,500, up $1,000 from 2026. The IRA contribution limit remains unchanged at $7,500.
- Savers aged 50 and older will see their 401 catch-up limit rise to $8,500 in 2027, while those aged 60 to 63 gain an extra $11,750 under Secure 2.0. These provisions enable pre-retirement savings boosts.
- "Make sure you're capturing your full employer match," said Sean Michael Pearson, a certified financial planner with Ameriprise Financial Services. Nearly 19% of employees failed to secure full matches in 2026.
- Consistently increasing savings rates is the "most important habit," according to Pearson. About 27% of 401 plans use auto-escalation, with most boosting deferrals by 1% annually.
- Although maxing out a 401 is difficult, only 14% of participants achieved this in 2025, according to Vanguard. Steadily increasing contributions by small amounts can lead to significant retirement savings.
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Spectrum News 13+2 Reposted by 2 other sources
Employees will be able to contribute more to 401(k)s in 2027, IRS says
The contribution limit will increase to $25,500 in 2027, up from $24,500 this year.
·Orlando, United States
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Total News Sources15
Leaning Left1Leaning Right1Center5Last UpdatedBias Distribution72% Center
Bias Distribution
- 72% of the sources are Center
72% Center
14%
C 72%
14%
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