The IRS will allow workers to put more money into several employer-sponsored retirement plans in 2027. The agency raised the annual employee contribution limit for 401(k) plans to $25,500, up from $24,500 in 2026.
The new limit also applies to most 403(b) plans, eligible 457 plans and the federal government’s Thrift Savings Plan. The change was included in the IRS’s 2027 retirement-account adjustments announced Thursday.
Higher limits for older workers
Savers age 50 and older will receive a higher catch-up limit next year. They will be able to contribute an additional $8,500, compared with $8,000 in 2026. That catch-up amount is separate from the standard $25,500 employee deferral limit.
A larger provision applies to workers ages 60 through 63. Under changes enacted through Secure 2.0, those savers can contribute an additional $11,750 in 2027. That amount is $500 higher than the 2026 limit and is also in addition to the standard contribution allowance.
| Retirement account provision | 2026 | 2027 |
|---|---|---|
| 401(k) employee contribution limit | $24,500 | $25,500 |
| Catch-up contribution, age 50 and older | $8,000 | $8,500 |
| Special catch-up, ages 60-63 | $11,250 | $11,750 |
| IRA contribution limit | $7,500 | $7,500 |
IRA limit stays the same
The annual contribution limit for individual retirement accounts, or IRAs, will remain $7,500 in 2027. The IRA catch-up contribution for people age 50 and older will also remain unchanged at $1,100.
The IRS additionally increased the income thresholds used to determine eligibility for Roth IRA contributions, although the announcement provided in the report did not list the new thresholds. Roth IRAs are retirement accounts funded with after-tax money, and income limits can affect whether a person may contribute directly.
The retirement changes arrive one week after the IRS released other inflation-related adjustments for 2027, including changes to federal income-tax brackets, capital-gains brackets and estate- and gift-tax exemptions.
“Before worrying about contribution limits, make sure you're capturing your full employer match,” said Sean Michael Pearson, a certified financial planner with Ameriprise Financial Services in Conshohocken, Pennsylvania.
Employer matching contributions are separate from the employee limits described by the IRS. Vanguard reported that only 14% of participants maxed out their 401(k)s in 2025, based on information from more than 1,300 qualified plans and nearly 5 million participants. The firm estimated the average combined savings rate, including employer contributions, at 12.1%.
A separate Fidelity analysis of 27,300 corporate plans and nearly 26 million participants found that about 19% of employees were not contributing enough during the second quarter of 2026 to receive their companies’ full matching contributions.
What changes in 2027
- The standard employee limit for 401(k), 403(b), most 457 plans and the Thrift Savings Plan rises to $25,500.
- The age-50 catch-up limit increases to $8,500, while the special ages-60-to-63 limit reaches $11,750.
- The IRA contribution limit remains $7,500, with a $1,100 catch-up limit for savers age 50 and older.
