The IRS is giving retirement savers a little more room in 2027, lifting the 401(k) contribution cap while also nudging up several other limits tied to age and income. The changes matter most for workers trying to squeeze more into tax-advantaged accounts before the next filing season rolls around, especially those nearing retirement and looking to make every dollar count.
The headline move is simple: the 2027 401(k) limit rises to $25,500, which is $1,000 higher than the 2026 cap of $24,500. That increase comes through the agency’s routine inflation adjustment process, which is meant to keep retirement rules from getting stale when prices keep climbing.
IRS Chief Executive Officer Frank J. Bisignano said the increase will help families keep more of what they earn. He also said the updated figures give taxpayers and employers a clearer picture for planning ahead, which is exactly the kind of boring but important detail that can make a real difference in retirement savings.
Not every account is getting a bigger cap, though. The IRA contribution limit stays at $7,500 for 2027, so savers using those accounts will not see the same boost as workers putting money into a 401(k). Even so, the broader set of adjustments still changes the playing field for people building long-term savings.
For workers 50 and older, catch-up contributions continue to be a big part of the picture. The IRA catch-up limit remains $1,100, and that figure has its roots in the SECURE 2.0 Act of 2022, which tied it to annual cost-of-living updates. That means older savers are still getting a chance to put a little more away as retirement draws closer.
There is also a more noticeable jump for people using workplace plans like 401(k)s, 403(b)s, governmental 457 plans, and the federal Thrift Savings Plan. The catch-up amount for those accounts rises to $8,500, up from $8,000 in 2026, giving older workers more breathing room if they want to close the gap before retirement.
That higher catch-up limit can push total annual contributions for savers 50 and over in those plans to $34,000 starting next year. For anyone who has spent years trying to play catch-up after delayed savings, that is a serious upgrade, not just a small tweak at the margins.
There is another notch for people between 60 and 63. Under the same SECURE 2.0 framework, they can contribute up to $11,750 to those plans, a special provision aimed at people in the final stretch before retirement who may be earning more and trying to save fast. It is a narrow window, but for many households it can be the most valuable one.
The IRS also said the income ranges used to figure out deductible traditional IRA contributions, Roth IRA eligibility, and the Saver’s Credit are all going up in 2027. That matters because the limits do not just affect how much can be saved, but also who can claim certain tax benefits without running into phaseouts. For households trying to juggle income, taxes, and retirement goals at the same time, those adjusted ranges can open a few more doors.
