US 2027 401(k) limit forecast at $25,500, up $1,000 from 2026

Saving an extra $1,000 a year may not sound like much. But for anyone who fills their US 401(k) retirement account every year, it is a figure to build into the budget early. In 2026 the employee tax-deferred contribution limit is $24,500; two retirement consultancies, Milliman and Marsh, give the same forecast for 2027: $25,500.

To be clear: as of November 2026, all the 2027 figures below are forecasts, not an official announcement from the US Internal Revenue Service (IRS). 401(k) Specialist's report of 20 October 2026 likewise states that these are only forecasts. This article will be updated with the official figures once the IRS publishes them.

2027 forecast figures at a glance (as of November 2026)

The figures below combine Milliman's update of 13 August 2026 and Marsh's forecast published on 15 October 2026. The 2026 figures already announced by the IRS are in brackets:

• Employee tax-deferred contribution limit for 401(k), 403(b) and 457 plans: $25,500 ($24,500)
• Catch-up contribution for those aged 50 or over: $8,500 ($8,000)
• Enhanced catch-up for those aged 60 to 63: $11,750 ($11,250)
• Annual total contribution limit for defined contribution plans (Section 415(c)): $75,000 ($72,000)
• Compensation limit that can be counted for contributions: $375,000 ($360,000)
• Milliman also forecasts the threshold for a highly compensated employee (HCE) at $170,000

When the IRS usually announces

Marsh notes that the IRS usually announces next year's limits in late October or early November. The actual dates of the past two years show how flexible that "usually" is: according to 401(k) Specialist, the 2025 figures were announced on 1 November 2024, while the 2026 figures came later, on 13 November 2025.

On the 2026 occasion, the IRS announced the figures in press release IR-2025-111 and Notice 2025-67, raising the 401(k) limit from $23,500 to $24,500. 401(k) Specialist, citing Accounting Today, reported that the announcement came later than usual, linked to the US federal government shutdown. In other words, it is hard to predict exactly when the 2027 figures will appear based on past practice.

Where the two forecasts come from

The limits are adjusted for inflation, so the key to the forecasts is the consumer price index (CPI). Milliman's August version is based on a 3.4% rise in CPI over the 12 months to 31 July 2026. The firm also sets out a risk: if CPI for August and September combined falls by about 0.37%, the tax-deferred contribution limit would be $500 lower than forecast. Milliman also says plainly that the figures are forecasts and are not guaranteed to be accurate.

On more recent data, according to 401(k) Specialist, Milliman estimates the annual adjustment factor for 2027 at about 3.5%, based on a 3.7% rise in CPI-U over the 12 months to 30 September 2026. This figure is second-hand, and we could not verify it directly on Milliman's page.

After 50: catch-up contributions and the new Roth threshold

People aged 50 or over can make catch-up contributions on top of the basic limit. The 2026 catch-up announced by the IRS is $8,000, giving $32,500 with the basic limit. If the 2027 forecasts come true, the combined limit for those aged 50 or over would be $34,000; for those aged 60 to 63, the enhanced catch-up is $11,750, which would give $37,250 in total.

Higher earners should note another threshold. Marsh forecasts that the FICA (Federal Insurance Contributions Act) wage threshold that determines whether catch-up contributions must be made on a Roth (after-tax) basis will rise from $150,000 to $155,000. According to Marsh, if an employee's FICA wages in 2026 exceed $155,000, their catch-up contributions in 2027 must be treated as Roth. This too is a forecast.

Employer matching contributions and the overall limit

Besides $25,500, there is another line worth watching: the Section 415(c) annual total contribution limit. Marsh and Milliman both forecast that it will rise from $72,000 in 2026 to $75,000, and that the compensation limit that can be counted for contributions will rise from $360,000 to $375,000.

How employer matching contributions interact with these limits depends on the terms of each plan, and the sources cited here do not go into detail. If you plan to change your contribution rate in 2027, the safer course is to confirm the matching rules with your plan administrator first.

IRAs for reference

Limits for individual retirement accounts (IRAs) are set separately. The IRS announced that the 2026 IRA contribution limit rises from $7,000 to $7,500, and the catch-up for those aged 50 or over from $1,000 to $1,100. The forecasts cited here do not give 2027 IRA figures.

What you can do before the official announcement

1. Use the 2026 limits already announced by the IRS to check whether you have used up this year's contributions.
2. Treat $25,500 as a reference value for 2027 planning, not a final figure; if inflation data weaken, the final figure could be $500 lower than forecast.
3. If you are 50 or over, or about to reach 60 to 63, note that the catch-up allowance changes with age.
4. If your 2026 wages are close to $155,000, find out in advance how treating catch-up contributions as Roth will affect your tax position.
5. For personal tax arrangements, consult a licensed US tax or financial professional.

With two firms giving the same figure, $25,500 looks close to settled; but the final decision rests with the IRS. Until the official notice is out, leaving room in your budget is more practical than rushing to change your contribution rate.

Prices and details correct as of November 2026

This article is general information, not investment, tax or insurance advice. Everyone’s circumstances differ; consult a licensed professional before making decisions.