Overview
- The IRS, which announced the limits on Thursday, Nov. 12, 2026, set the 2027 employee deferral cap for 401(k) plans at $25,500, up $1,000 from 2026.
- The increase applies to 401(k)s, 403(b)s, most governmental 457 plans and the federal Thrift Savings Plan, so the higher cap affects most workplace plans.
- Catch‑up contributions will rise to $8,500 for people 50 and older and offer a larger $11,750 option for those aged 60 to 63 under Secure 2.0 rules, both in addition to the $25,500 limit.
- IRA contribution limits stay unchanged at $7,500 with a $1,100 catch‑up, and experts urge savers to prioritize capturing any full employer match before increasing deferrals.
- Plan sponsors and participants should update payroll elections in December to have new 2027 deferral limits take effect with the first January paychecks, and these retirement changes come as part of wider IRS inflation adjustments to tax brackets, capital gains and estate rules.