Employers, it’s time to update your benefits communications for the year ahead. The IRS just announced retirement plan contribution limits for 2027.
In 2027, employees can contribute up to $25,500 into their 401(k) and 403(b) plans, most 457 plans, and the Thrift Savings Plan for federal employees, the IRS announced Nov. 12. That’s a $1,000 jump from the $24,500 limit in 2026.
The catch-up contribution limit for employees ages 50 and older who participate in 401(k) and 403(b) plans, most 457 plans, and the federal government’s Thrift Savings Plan will rise to $8,500 in 2027, from $8,000 in 2026. Those aged 60 to 63 can instead save an extra $11,750, up from $11,250, based on changes due to SECURE Act 2.0.
The limit on total employer-plus-employee contributions to defined contribution plans will increase to $75,000 in 2026, up from $72,000 in 2026.
The announcement comes after most organizations have already started open enrollment for next year, but employers will still want to convey the news to employees now and throughout the next year. Employees can usually make changes to their retirement account contribution rates year-round, though some employers place limits on how often plan participants can make an adjustment.
Related How-to Guide: How to Make Your Open Enrollment a Success and Maximize Benefits
Although employees will be able to sock away more money for their post-work years next year, the past year has been rocky for many employees’ retirement goals. Amid financial pressures, employees have lowered contributions to their retirement accounts, reduced savings, and borrowed from their funds. Data from Dayforce from earlier this year, for example, found that more workers are dipping into their retirement funds. Loan use from retirement accounts rose for the third consecutive year and is now 22% higher than it was in 2022.
MetLife also recently reported this year that retirement insecurity is rising sharply: 51% of retirees fear running out of money in retirement, up from 30% less than a decade ago, while 58% of pre‑retirees feel the same. Pre‑retirees expect their savings to last only 15 years, down from 19 just four years ago, despite anticipating decades in retirement.
Meanwhile, more employees say they need more money saved for their retirement. Americans’ so-called magic number to retire comfortably in 2026 climbed to $1.46 million — a $200,000 jump from last year, according to recent figures from Northwestern Mutual. For those with $1 million or more in investable assets, the magic number is even higher, at $2.67 million.
Other Limits
The IRS also announced that the annual IRA contribution limit is staying at $7,500 next year. The IRA catch‑up contribution limit for individuals aged 50 and older will remain at $1,100.
The retirement amount limits come shortly after the agency released dozens of other inflation adjustments for 2027, including federal tax brackets, flexible spending accounts, and commuter benefits.
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