American workers could be able to shelter more money in workplace retirement plans next year. According to a forecast from benefits consultant Milliman, the 2027 employee deferral limit for 401(k), 403(b) and most 457 plans is projected to rise by $1,000, from $24,500 in 2026 to $25,500. The Internal Revenue Service has not yet announced the official figures.

What the forecast projects

Milliman’s most recent 2027 IRS limits forecast, reported in mid-September by 401(k) Specialist magazine, left its numbers unchanged from the firm’s July update. The projections cover several key thresholds:

  • Employee deferral limit: $25,500, up from $24,500 in 2026.
  • Catch-up contributions for workers 50 and older: $8,500, up from $8,000.
  • “Super catch-up” for ages 60 to 63: $11,750, up $500.
  • Maximum annual addition to defined contribution plans: $75,000, up $3,000 from $72,000.
  • Emergency savings account limit for defined contribution plans: $2,700, up $100.

The forecast did not include a 2027 projection for individual retirement accounts. The 2026 IRA limit is $7,500, according to the IRS announcement made last year.

Why the numbers depend on inflation

Many retirement plan limits are indexed to inflation, using the Consumer Price Index measured through the end of September. Milliman’s projection assumed that consumer prices have risen about 3.1% since the end of September 2025 and estimated a 0.25% monthly increase for September 2026, producing an annual adjustment factor of roughly 3.4%.

Because the figures are tied to that final inflation reading, the forecast carries some range. If September’s price growth came in at a very low level, Milliman noted, the deferral limit might rise by only $500, to $25,000, and the standard catch-up amount could stay at $8,000. Higher inflation could push some other thresholds up further. For example, the compensation threshold used to identify key employees could reach $245,000 instead of the projected $240,000 if September CPI growth exceeded 0.35%.

The September inflation data was scheduled for release on October 14, 2026, which clears the way for the IRS to finalize its calculations.

When to expect the official announcement

The IRS typically announces its annual cost-of-living adjustments for retirement plans in late October or early November. Last year, the 2026 limits were announced on November 13, 2025. Once the agency publishes its notice, employers and plan administrators generally update payroll systems and plan documents ahead of the new year.

What the “super catch-up” means

The enhanced catch-up for workers aged 60 through 63 was created under the SECURE 2.0 Act and began in 2025. It allows a higher catch-up contribution than the standard amount available to other workers aged 50 and over. Under Milliman’s forecast, savers in that narrow age band could contribute up to $11,750 in catch-up contributions on top of the $25,500 base deferral, subject to what their plan allows.

Not all employer plans offer catch-up contributions, and eligibility rules can vary. Workers are generally advised to check their plan documents or ask their human resources department what options are available.

What savers can do now

Because the numbers are still projections, benefits specialists generally suggest that workers avoid locking in assumptions until the IRS acts. Still, the direction of travel is clear: the limits have risen in recent years and are projected to do so again.

  • Review current-year contributions to see whether the 2026 limit of $24,500 will be reached before December 31.
  • Check whether an employer match is being fully captured, since match dollars are generally counted separately from the employee deferral limit.
  • Look at open enrollment materials, which many employers distribute in the fall, for any changes to plan features or contribution options.
  • Consider whether payroll contribution percentages need to be adjusted in January once the new limits are confirmed.

The bigger picture

Higher limits do not help every worker equally. Data from retirement plan providers has consistently shown that only a minority of participants contribute the maximum each year, and many workers contribute well below the cap. For those savers, the more pressing issue is often whether they are contributing enough to receive the full employer match, rather than how high the ceiling sits.

For higher earners and those catching up late in their careers, however, even incremental increases can matter. A $1,000 rise in the deferral limit, if realized, would let those savers shelter additional pre-tax or Roth dollars, depending on how their plan is structured.

This article is for informational purposes only and does not constitute personalized financial, tax or investment advice. Readers should consult a qualified professional about their own circumstances.

Sources: 401(k) Specialist, Milliman, Internal Revenue Service.