The 2027 401(k) employee limit is projected to reach $25,500. That is $1,000 more than the official 2026 baseline of $24,500.
An elective deferral is the share of pay you direct into the plan. Actuarial firm Milliman projects the $25,500 figure for 401(k), 403(b) and eligible 457 plans in its August forecast. The IRS lists $24,500 as the 2026 elective-deferral baseline.
Table of Contents
- What does the $25,500 cover?
- How much extra can savers 50 and older contribute?
- What is the total employer-plus-employee limit?
- When should you act on the 2027 number?
What does the $25,500 cover?
The $25,500 cap applies to pre-tax and Roth elective deferrals combined. It applies across 401(k), 403(b), governmental 457(b) and TSP accounts held by the same worker.
Reporting by Considerable describes this combined treatment in its 2027 projection guide. For example, $15,000 in a 401(k) plus $10,500 in a 403(b) reaches the full amount. Splitting savings across plans does not create a second limit.
How much extra can savers 50 and older contribute?
Workers age 50 and older can add a catch-up on top of the $25,500. 401(k) Specialist projects that regular catch-up at $8,500 and the SECURE 2.0 ages-60-to-63 amount at $11,750 in its limit analysis.
That implies up to $34,000 for most savers 50 and older. Savers ages 60 to 63 could reach $37,250 if the enhanced amount applies.
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What is the total employer-plus-employee limit?
The combined employer-plus-employee annual-additions limit is projected to rise from $72,000 in 2026 to $75,000 in 2027. 401(k) Specialist reports that $3,000 increase for 2027.
That leaves room for substantial employer contributions beyond the employee deferral. A worker contributing $25,500 could receive up to $49,500 from the employer side within the $75,000 total.
When should you act on the 2027 number?
The $25,500 figure is still a projection. InvestToFire notes the IRS normally issues final 2027 limits in late October or November after September CPI is final in its October update.
Milliman warns the outcome hinges on September 2026 inflation. Growth below 0.04% would cut the projection to $25,000 and hold the regular catch-up at $8,000. Considerable advises holding 2027 payroll changes until the IRS notice, while it projects the IRA limit to stay at $7,500.
- Wait for the IRS notice before changing 2027 payroll elections.
- Combine pre-tax and Roth deferrals across accounts when setting your amount.
- Plan IRA savings around $7,500, apart from the 401(k) change.
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