Key Points
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The IRS just revealed higher 401(k) contribution limits for 2027.
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The new limit for savers under 50 is $25,500.
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Older savers can make a larger catch-up contribution than in 2026.
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If you have access to a 401(k) plan through your work, you probably know that it’s an easy way to save for retirement. All you need to do is tell your employer how much money you want to contribute, up to the allowable annual limit, and your payroll department takes care of the rest.
Contributions to 401(k)s are deducted from your paycheck, making it easy to stay on track. And you may even get free money through a workplace match.
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Because 401(k) contribution limits are much higher than IRA limits, many savers aren’t able to put in the max. But if you’re someone who can max out a 401(k), here’s some good news. The IRS just announced higher 401(k) contribution limits for 2027. Here’s what you need to know.
There’s even more opportunity to save
The amount of money you’re allowed to contribute to a 401(k) depends on your age. If you’re under 50, the current limit is $24,500, which will rise by $1,000 to $25,500 in 2027.
If you’re 50 or older, you get to make a catch-up contribution in your 401(k). That catch-up is currently worth $8,000, but in 2027, it will increase to $8,500.
And in case you’re wondering, you do not have to be behind on savings to take advantage of catch-up contributions. The IRS won’t be checking your 401(k) balance to see how much of a balance you’ve accumulated. As long as you meet the age requirements, catch-ups are yours to benefit from.
And speaking of catch-ups, there’s a super 401(k) catch-up available for savers between the ages of 60 and 63. This year, it’s worth $11,250. In 2027, it’s rising to $11,750.
Now that super catch-up can’t be stacked on top of the regular catch-up for people 50 and over. In other words, if you’re 62, you can’t contribute $8,500 plus $11,750 as your 2027 catch-up. You’re limited to $11,750. But it’s still a great way to give your 401(k) a pre-retirement boost.
Don’t sweat it if you can’t max out
Maxing out a 401(k) is very difficult unless you earn a high salary or have very low expenses. If you’re unable to take advantage of these new limits, don’t sweat it. Instead, do what you can to increase your contribution rate.
If you’re saving $5,000 in your 401(k) this year, aim for $6,000 next year. Steadily increasing your savings rate could lead to a lot more money by the time your career ends.
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