The 2027 401(k) Limit Is Likely Rising to $25,500. Here’s What It Means for Your Paycheck
Last updated 10/09/2026 by
SuperMoney Team
Edited by
Andrew Latham
Summary:
The IRS won’t confirm 2027 retirement limits until October or November, but Milliman’s latest forecast says the 401(k) cap will rise from $24,500 to $25,500, or $25,000 if September inflation comes in nearly flat. Maxing out at $25,500 means setting aside about $2,125 a month instead of $2,042. Catch-up limits are rising too, and higher earners may be forced to make those catch-up contributions to a Roth.
Every fall, the IRS adjusts retirement contribution limits for inflation. This year the number you want to watch is the 401(k) deferral limit, because inflation has been running hotter than it did a year ago and the bump should be bigger than the usual $500.
The official numbers aren’t out yet. But actuaries at Milliman have run the math using inflation data through August, and their forecast gives us a pretty good preview.
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What’s likely changing in 2027
Here’s how this year’s confirmed limits compare to the projected 2027 numbers. Treat the 2027 column as an estimate until the IRS says otherwise.
| Limit | 2026 (confirmed) | 2027 (projected) |
|---|---|---|
| 401(k), 403(b), 457 employee deferral | $24,500 | $25,000 to $25,500 |
| Catch-up, age 50 and over | $8,000 | $8,000 to $8,500 |
| Catch-up, ages 60 to 63 | $11,250 | $11,750 |
| Total plan additions (you plus employer) | $72,000 | $75,000 |
| Roth catch-up wage threshold | $150,000 | about $155,000 |
Why a range? Milliman’s spring forecasts put the 401(k) limit at $25,000. Its latest update, using inflation data through August, moved it to $25,500. That holds unless September prices barely move (a monthly CPI increase under 0.04%). The September CPI report comes out October 14.
What an extra $1,000 a year is actually worth
Going from $24,500 to $25,500 sounds small. It’s $83 more per month, or about $38 per biweekly paycheck. Nobody’s lifestyle changes over $38.
But run it forward. An extra $1,000 invested every year for 25 years at a 7% average return grows to roughly $63,000. That’s an assumption, not a promise, but it shows why small annual increases matter.
There’s an upfront perk too. If you’re in the 22% federal bracket, that extra $1,000 deferral cuts your federal tax bill by $220 for the year. Your take-home pay only drops by $780.
Don’t raise your contribution before you’ve done these first
The new limit only matters if you’re close to the old one. Most people aren’t, and that’s fine. If you’re not maxing out, here’s the order I’d follow.
First, get your full employer match. Say you earn $60,000 and your company matches 100% of the first 4% you contribute. That’s $2,400 a year in free money. Skipping it is like turning down a 4% raise.
Second, if you have a high-deductible health plan, fund an HSA. It’s the only account that’s tax-free going in, growing, and coming out for medical costs.
Third, pay off anything charging you more than about 10%. A credit card at 22% APR will beat nearly any market return you can reliably expect. Putting $500 a month into investments while carrying a $6,000 card balance at 22% is like filling a bucket with a hole in it.
Then raise your 401(k) contribution toward the limit.
Catch-up contributions: bigger, but with a catch
If you’re 50 or older, you can put in extra on top of the standard limit. For 2026 that’s $8,000. Projections for 2027 put it at $8,000 to $8,500.
Ages 60 through 63 get a bigger window. That “super catch-up” is $11,250 now and projected to reach $11,750. Do the math for someone who turns 61 in 2027: $25,500 plus $11,750 is $37,250, or about $3,100 a month headed into the account.
Now the twist. Under SECURE 2.0, if you earned more than $150,000 in Social Security wages the prior year, your catch-up contributions must go in as Roth. You pay tax on that money now instead of getting the deduction. The threshold is projected to rise to about $155,000. If you’re near it, ask your plan administrator how they’re handling this, because not every plan has set up the Roth option cleanly.
When will we know the real numbers?
The IRS usually announces next year’s limits in October or November. Milliman notes that some projections could still shift depending on September inflation. So there’s no reason to wait around.
Here’s what I’d do. Set your contribution as a percentage of pay instead of a fixed dollar amount. If you earn $100,000 and contribute 15%, you’re at $15,000 a year and it scales automatically when you get a raise. Then, in January, check whether you want to bump it up once the official limit is confirmed.
If you want to see what a higher contribution does to your monthly budget before you commit, the SuperMoney app pulls your accounts into one place so you can track spending, set a savings goal, and see where an extra $83 a month would come from.
Key takeaways
- The 2026 401(k) limit is $24,500. Milliman projects $25,500 for 2027, or $25,000 if September inflation is nearly flat.
- Maxing out at $25,500 works out to roughly $2,125 a month, or $83 more than this year.
- Workers 60 to 63 could contribute up to about $37,250 in 2027 with the projected super catch-up.
- Catch-up contributions must be Roth if your prior-year Social Security wages topped $150,000 (about $155,000 projected for 2027).
- The IRS typically confirms the new limits in October or November.
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