IRS Announces Increased 401(k) Contribution Limits for 2027
The Internal Revenue Service (IRS) has announced updated retirement savings limits for the 2027 tax year. The employee deferral limit for 401(k), 403(b), and most 457 plans will increase to $25,500, up from $24,500 in 2026. Additionally, the catch-up contribution limit for savers aged 50 and older will rise to $8,500, while those aged 60 to 63 can contribute an extra $11,750 under Secure 2.0 provisions. While workplace plan limits are rising, Individual Retirement Account (IRA) contribution limits remain unchanged at $7,500 for 2027. Financial experts emphasize the importance of capturing full employer matches and utilizing auto-escalation strategies to maximize long-term retirement savings. The announcement follows a series of other inflation-related adjustments released by the agency, including updates to federal income tax brackets.