Here's the lowdown
The employee contribution limit for 401(k), 403(b), most governmental 457 plans and the federal Thrift Savings Plan rises from $24,500 to $25,500 in 2027.
The general catch-up limit for people 50 and older rises to $8,500, while workers ages 60 through 63 get an $11,750 catch-up limit.
The IRA contribution limit stays at $7,500, and the IRA catch-up amount for people 50 and older remains $1,100.
The basic bump is $1,000
The 2027 retirement-plan increase is easy to remember: another $1,000.
The IRS's official limits raise the employee deferral ceiling for 401(k), 403(b), most governmental 457 plans and the federal Thrift Savings Plan from $24,500 to $25,500.
That is the amount an employee can choose to put into the plan through payroll. It is separate from the much larger total contribution limit that includes employer money. That combined defined-contribution ceiling rises from $72,000 to $75,000 for 2027.
The new numbers take effect January 1, 2027. They create more room to save. They do not create more cash in anyone's paycheck.
Catch-up math has three lanes
People who are at least 50 by the end of 2027 can generally add an $8,500 catch-up contribution. That is $500 more than the 2026 amount.
Add it to the $25,500 base limit and the total reaches $34,000.
Workers who turn 60, 61, 62 or 63 during 2027 get a larger catch-up under SECURE 2.0. Their limit rises to $11,750, bringing the possible employee contribution to $37,250.
That age window is narrow by design. A 59-year-old uses the normal base limit. A 60-year-old can use the special catch-up. A 64-year-old returns to the general age-50 catch-up amount.
High earners face a Roth checkpoint
The catch-up rule also has a tax-treatment wrinkle.
The wage threshold used to decide whether certain 2027 catch-up contributions must be made as Roth contributions rises to $155,000. The IRS notice ties that test to 2026 wages from the employer sponsoring the plan.
Roth contributions are made after tax. Traditional pretax contributions can reduce current taxable wages, subject to the plan and tax rules. The new threshold does not remove the catch-up. It changes where the contribution must go for covered higher-paid employees.
That makes employee data important before open enrollment. Payroll and recordkeeping systems need the correct prior-year wage figure, age and contribution type.
The IRA limit did not move
The workplace-plan ceiling went up. The IRA ceiling stayed put.
The 2027 IRA contribution limit remains $7,500. People 50 and older can still add the $1,100 IRA catch-up, for a total of $8,600.
This is where similar words can create confusion. A 401(k) limit and an IRA limit are separate. Using one does not automatically erase the other, although income, workplace-plan coverage and tax rules can affect whether a traditional IRA contribution is deductible.
The lack of an IRA increase also means savers should not copy the new $25,500 figure into every retirement account they own.
Roth IRA income bands moved higher
The contribution ceiling stayed flat, but the income ranges moved.
For married couples filing jointly, the 2027 Roth IRA contribution phase-out runs from $250,000 to $260,000 of adjusted gross income. For single filers and heads of household, it runs from $158,000 to $173,000.
Inside those bands, the permitted contribution gradually shrinks. Above the top of the band, a direct Roth IRA contribution is not allowed under the normal rule.
Traditional IRA deduction ranges also increased. For a single filer or head of household who participates in a workplace plan, the deduction phases out from $83,000 to $93,000. For a married couple filing jointly when the contributing spouse participates, the range is $133,000 to $153,000.
The real deadline comes before January
Employees will see the new limit in 2027. Employers have work to do before then.
Plan documents and payroll settings need the correct base and catch-up limits. Employee notices should separate the $25,500 base amount from the $34,000 and $37,250 age-based totals. Higher-paid employees need a clear explanation of the Roth catch-up rule.
Automatic contribution elections deserve a look too. A worker who set a flat dollar amount to hit the 2026 maximum will not automatically reach the new ceiling unless the election or plan feature adjusts.
The IRS raised the cap. Turning that extra $1,000 into retirement savings still requires payroll systems, plan records and employee choices to line up.
