The 2027 contribution limit for 401(k) plans increases to $25,500, $1,000 more than the 2026 limit of $24,500.
The IRS increased the amount workers can contribute to their 401(k), up $1,000 from last year.
The government adjusted the inflation limit for 2027 to $25,500, an increase from the 2026 limit of $24,500, according to a recent IRS release.
“Along with tax cuts for working families, this increase in retirement limits will help American families keep more of their hard-earned income,” IRS Director General Frank J. Bisignano said in a statement.
“With the new adjustment in place, the IRS is giving taxpayers and employers the information needed to make retirement planning decisions for the coming year.”
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The IRS increased the amount workers can contribute to their 401(k), up $1,000 from last year. (Getty iStock/Getty Images)
The limit for individual retirement accounts (IRAs) will remain at $7,500.
For people 50 and older, the IRA catch-up contribution limit remains at $1,100. It was amended under the SECURE Act of 2022 to include an annual cost of living adjustment, according to the IRS.
The catch-up contribution limit for workers 50 and older with a 401(k), 403(b), government 457 plan or the federal Thrift Savings Plan increased by $500 to $8,500.
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The IRS adjusted the 2027 inflation limit to $25,500, an increase from the 2026 limit of $24,500. (Kevin Carter/Getty Images, File / Getty Images)
The IRA catch-up contribution limit for individuals ages 50 and older, which was amended under the SECURE 2.0 Act of 2022 (SECURE 2.0) to include an annual cost-of-living adjustment, remains $1,100.
The catch-up contribution limit that generally applies to employees age 50 and older who participate in most 401(k), 403(b), government 457 plans and the federal Thrift Savings Plan is increased to $8,500, up from $8,000 for 2026.
And people 50 and older on most of these plans will be able to contribute up to $34,000 each year starting next year.
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The limit for individual retirement accounts (IRAs) will remain at $7,500. (iStock Getty Images / Getty Images)
Workers ages 60 to 63 in these plans can contribute $11,750 due to a change in the SECURE 2.0 Act of 2022.
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The IRS added that “the income ranges for determining eligibility to make deductible contributions to traditional IRAs, to contribute to Roth IRAs, and to claim the saver’s credit have all increased for 2027.”
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