The 2027 401(k) limits are here. See how much more you can save next year.

Andrew Keshner

Defined-contribution plans are getting a bump. IRA savers are not.

The IRS released the 2027 inflation adjustments for retirement accounts on Thursday.

Retirement savers can put more money into their 401(k)s next year, but they're not getting an extra savings boost for their IRA accounts.

The maximum contribution to a 401(k) is climbing to $25,500, up from $24,500 this year, the IRS said Thursday.

Next year, people will be able to put up to $7,500 in their IRAs, the same limit as this year, the tax agency said.

The new contribution limits are part of IRS inflation adjustments for 2027 taxes. The higher 401(k) limits underscore inflation's broad impact on Americans' finances. Earlier this week, October inflation rates exceeded forecasts.

Last week, the IRS released 2027 rules for income-tax brackets, long-term capital-gains taxes and a batch of other provisions that are indexed for inflation. Next year's tax brackets are poised to rise just over 3%, a somewhat steeper increase than the 2% adjustment for 2026.

The IRS also updated numbers for a range of retirement plans beyond 401(k)s. The $25,500 yearly maximum also applies to 403(b) plans, as well as governmental 457 plans and the Thrift Savings Plan.

The contribution limits for 401(k)s and these other plans increased by $1,000 from 2025 to 2026, as well.

These are scheduled annual changes, but the rule changes matter for the trillions of dollars in Americans' nest eggs: 401(k)s and other defined-contribution plans collectively held $15 trillion, according to second-quarter statistics from the Investment Company Institute. There's nearly $20 trillion sitting in IRAs, the trade group said.

Older savers can save more due to bigger catch-up provisions.

People age 50 and older can contribute an extra $8,500 to their 401(k)s on top of the maximum $25,500. That means they could conceivably put in $34,000. Workers ages 60 to 63 have a supplemental catch-up allowance of $11,750.

The IRA catch-up provision remains at $1,100.

Heads up on Roth IRAs

The IRS announcement also had news for Roth IRAs, which are funded with after-tax dollars.

Savers have to be under income certain thresholds to put money in these accounts. For 2027, the income phaseout begins at $158,00 for individuals; once their earnings hit $173,000, they're no longer eligible to make Roth IRA contributions.

The income phaseout for married couples begins at $250,000; once their earnings reach $260,000, they're no longer eligible for Roth IRA contributions.

The income levels to deduct contributions to traditional IRAs also increased slightly. Those deduction rules also depend on whether a filer or their spouse has access to a retirement savings account through their job.

Few savers max out

While the IRS is allowing bigger 401(k) contributions, few people reach the savings ceiling.

Last year, just 14% of participants with Vanguard defined-contribution accounts saved the maximum amount, according to Vanguard's annual report. The savers able to put away the maximum amount tended to be older and have larger incomes.

What's really important is saving at least some amount - and there's good news on that front, according to Fidelity. Between worker contributions and employer matches, people had an average 14.4% savings rate in their 401(k) accounts during the second quarter.

That set a record rate for the second consecutive quarter, Fidelity said. Its average 401(k) account balance was $155,800, a 10% increase from a year ago.

-Andrew Keshner

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11-12-26 1319ET