You Can Save More in a 401(k) Next Year, With a Bigger Catch-Up for People Over 50
The IRS says the 401(k) contribution limit rises to $25,500 in 2027, and the catch-up for workers 50 and older goes up to $8,500. A special catch-up for people ages 60 through 63 can push their total even higher, though higher earners must now make catch-up contributions after tax.
If you are still working and trying to build up your nest egg, you will be able to set aside a bit more next year. The Internal Revenue Service announced on November 12 that the most workers can put into a 401(k) plan will rise to $25,500 in 2027, up from $24,500 this year. The same limit applies to 403(b) plans, most governmental 457 plans, and the federal government's Thrift Savings Plan.
There is extra good news for people 50 and older. The catch-up amount, which lets older workers save beyond the standard limit, goes up to $8,500 from $8,000. Added together, that means a worker 50 or older can put away about $34,000 in one of these plans in 2027. For most savers, these are traditional pretax contributions, which means the money goes in before taxes and grows with taxes delayed until you take it out in retirement.
A smaller group gets an even bigger break. Under a 2022 law known as SECURE 2.0, workers who are 60 through 63 can use an enhanced catch-up of $11,750. For them, the total can reach about $37,250 for the year.
Higher earners face a rule that is already in effect. Under SECURE 2.0, workers who earn above a set wage from their employer must put their catch-up money into a Roth account, which is taxed now instead of later, even though their regular contributions can still go in before taxes. The requirement generally took effect in 2026 after a period of transition relief ended, and final IRS regulations generally apply in 2027. For 2027, the IRS updated the prior-year employer wage threshold to $155,000, so workers who earned more than that from their employer in 2026 will need to make their 2027 catch-up as Roth.
The news was not all about workplace plans. The limit for Individual Retirement Accounts, or IRAs, stays at $7,500, and the extra catch-up for IRA savers 50 and older is $1,100.
What does this mean for you in plain terms? If you can afford to add a little more to your workplace plan, the higher ceiling gives you room to do it. If you are in your early 60s, it is worth asking your plan administrator whether you qualify for the larger catch-up. And if you are a higher earner, check whether your 2027 catch-up will need to go into a Roth account, because that changes how it is taxed.
Go Deeper
What is the new 401(k) limit for 2027?
The IRS set it at $25,500, up from $24,500 in 2026. The same figure applies to 403(b) plans, most governmental 457 plans, and the federal Thrift Savings Plan.
How much more can people 50 and older save?
The catch-up contribution for workers 50 and older rises to $8,500 from $8,000, bringing their possible total to about $34,000 in 2027. For most savers these are traditional pretax dollars, which go in before taxes and grow with taxes delayed until retirement.
Is there a bigger catch-up for anyone else?
Yes. Under the SECURE 2.0 law, workers ages 60 through 63 can use an enhanced catch-up of $11,750, which can push their total to about $37,250 for the year.
What is the Roth rule for higher earners?
Under SECURE 2.0, higher earners must make their catch-up contributions as Roth money, which is taxed now rather than later, while their regular contributions can still be pretax. The requirement generally took effect in 2026 after transition relief ended, with final IRS regulations generally applying in 2027. For 2027, the IRS updated the prior-year employer wage threshold to $155,000, so workers who earned more than that from their employer in 2026 will need to make their 2027 catch-up as Roth.
Did IRA limits change?
No. The IRA contribution limit stays at $7,500, and the catch-up for IRA savers 50 and older is $1,100.
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