IRS Raises 2027 Retirement Contribution Limits for 401(k)
The IRS has announced that the 2027 contribution limit for 401(k), 403(b) and 457(b) retirement plans will increase to $25,500, up from $24,500 in 2026.
Higher Catch-Up Limits Boost Retirement Savings
Catch-up limits are going up, too:
- Employees age 50 and older can contribute an extra $8,500, for a total of $34,000, and
- Employees who turn 60, 61, 62 or 63 in 2027 can contribute an extra $11,750, for a total of $37,250.
The higher catch-up replaces the standard one, so employees can’t stack the two. And employees can make catch-up contributions only if the plan permits them.
Payroll also needs to keep an eye on the Roth catch-up threshold. Employees whose 2026 FICA wages from the employer sponsoring their plan exceed $155,000 generally must make 2027 catch-up contributions as Roth contributions. For 2026 catch-up contributions, the threshold was $150,000, based on 2025 wages.
Keep in mind, the higher limits don’t, by themselves, automatically change employees’ deferral elections. Employees should review their current elections and the plan’s procedures to determine whether a change is needed to contribute more in 2027.
More info: IRS announcement
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