The IRS has announced new retirement savings limits for 2027, raising the employee contribution cap for 401(k), 403(b), governmental 457 and federal Thrift Savings Plan accounts to $25,500, up from $24,500 in 2026. The IRS announcement, released on November 12, 2026 according to one source, also applies to most 457 plans and the federal Thrift Savings Plan.
Workers aged 50 and older can add an $8,500 catch-up contribution, up from $8,000 in 2026, bringing their total to $34,000. Savers aged 60 to 63 can instead contribute a higher $11,750 catch-up, up $500 from 2026, for a total of $37,250 if their plan offers catch-ups. Total contributions from employee and employer, including matching and profit sharing, can reach $75,000, up $3,000.S1S2
The IRA contribution limit stays at $7,500 for 2027, unchanged from 2026, with a $1,100 catch-up for savers 50 and older, for $8,600 in total. The Roth IRA income phase-out for single filers rises to $158,000 to $173,000. Workers who earned more than $155,000 in FICA wages from their employer in 2026, up from $150,000, must make any 2027 catch-up contributions as Roth contributions, and workers above that threshold cannot make catch-ups at all if their plan lacks a Roth option.S1S2
The changes arrive a week after the IRS released dozens of other 2027 inflation adjustments, including federal income tax brackets, capital gains brackets and estate and gift tax exemptions. Vanguard's 2026 How America Saves report found that only 14% of participants maxed out their 401(k)s in 2025, with an average combined savings rate of 12.1%. Fidelity data from the second quarter of 2026 showed about 19% of employees were not deferring enough to receive their full employer match.S2
Experts advise that anyone planning to max out a 2027 401(k) should change their contribution rate in December so it takes effect by the first January paycheck, a process that can take one or two pay periods. Planner Sean Michael Pearson of Ameriprise Financial Services in Conshohocken, Pennsylvania, recommended first capturing the full employer match and then gradually raising savings rates, noting that a 1% annual increase may be barely noticeable but can have a substantial long-term impact. Roughly 27% of 401(k) plans automatically escalated employee deferrals in 2025.S2
