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Savers can put $1,000 more into 401(k)s next year.
The IRS raised the 401(k) contribution limit for 2027 to $25,500, up $1,000 from this year. The limit for IRAs stays at $7,500.
The IRS adjusts these limits each year to keep up with inflation. The new cap also covers 403(b) plans for teachers and nonprofit workers, as well as the Thrift Savings Plan for federal employees.
Anyone 50 or older can add a catch-up contribution of $8,500, up $500 from this year. Workers ages 60 to 63 get a larger catch-up contribution of $11,750, so they can put away up to $37,250.
Workers who earn more than $155,000 in wages this year must put next year’s catch-up money into a Roth account. They’ll pay income tax on it now rather than get a deduction, though withdrawals in retirement are generally tax-free.
The income limits for Roth IRAs moved up, too. Married couples can make a full contribution with income up to $250,000, up from $242,000, and the option phases out completely at $260,000.
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