The United States Internal Revenue Service ( IRS ) has announced new contribution limits for retirement accounts in 2027.

The institution stated in a announcement on Thursday that next year, the maximum deferral contribution limit for 401(k) employees will be increased to $25,500, which is higher than the $24,500 limit in 2026. This adjustment applies to 401(k), 403(b), and most 457 plans, as well as the Federal Thrift Savings Plan ( Thrift Savings Plan ).

IRS also announced the supplementary payment limits for depositors aged 50 and above in 2027, the new savings limits for personal retirement accounts ( IRA ), as well as the higher income thresholds applicable to Roth IRA contributions.

Starting from 2027, the maximum contribution limit for 401(k) plans for savers aged 50 and above will increase to $8,500, up from $8,000 in 2026. However, according to the adjustments made under the Secure 2.0 legislation, investors aged 60 to 63 will be able to contribute an additional $11,750. This amount represents an increase of $500 compared to 2026.

Both of these quotas are additional to the maximum deferred payment limit of $25,500 in 2027.

IRS indicates that the payment limit for IRA in 2027 is $7,500, which is the same as in 2026. The supplementary payment amount for investors aged 50 and above, IRA, is also $1,100, which remains unchanged from 2026.

A week before the release of this announcement, the institution had just announced dozens of other inflation adjustments for 2027, including changes to federal income tax brackets, higher capital gains tax rates, increases to the exemption amounts for estate and gift taxes, as well as related provisions that affect families.

First, maximize the employer match for 401(k) contributions.

According to the Pioneer Navigation ( Vanguard ) report "How Americans Save in 2026," in 2025, only 14% of participants contributed the maximum amount to their 401(k) plans. The report is based on data from over 1,300 qualified plans and nearly 5 million participants. According to the same report, the average overall savings rate, including employer contributions, is estimated to be 12.1%.

Registered financial planner Sean Michael Pearson from Conshohocken, Pennsylvania Ameriprise Financial Services says: "Before worrying about the contribution limits, make sure you've received your full employer match first."

According to Fidelity's ( Fidelity ) analysis of 27,300 corporate plans and nearly 26 million participants, in the second quarter of 2026, approximately 19% of employees did not make sufficient contributions to their 401(k) plans, as a result of which they were unable to receive the full matching contributions provided by their companies.

Pioneer Navigation suggests that, depending on one's income, one should save an amount equivalent to 12% to 15% of their salary each year, which includes contributions from employers. However, according to a report by the company, in 2025, only a quarter of 401(k) participants will devote more than 10% of their income to deferred contributions.

Experts suggest that if you plan to contribute the maximum amount to your 401(k) plan in 2027, you should adjust your savings ratio in December so that the changes take effect from your first paycheck in January. This adjustment may take one to two pay cycles to be fully implemented.

Increase the 401(k) savings rate by 40% each year

Pearson indicates that "the most important habit" is to continuously increase the 401(k) savings rate over time.

For example, if you increase your 401(k) contribution rate by 1% each year, “you may not even notice a difference on your paychecks, but the long-term impact could be quite significant,” he said.

According to the annual survey of 401(k) plans conducted by the U.S. Plan Sponsor Committee ( Plan Sponsor Council of America ), in 2025, approximately 27% of 401(k) plans will automatically increase the proportion of employee deferred contributions over time, a mechanism known as "automatic escalation" ( auto-escalation ). The survey, conducted by this non-profit industry organization, covered 753 plans.

The US Initiative Sponsor Committee found that in programs that adopt an automatic increment mechanism, the vast majority, namely 69%, increase the deferred payment ratio by 1% each year.