5 Retirement Changes Coming in 2027 That Could Put More Money in Your Pocket

The IRS just released its 2027 retirement contribution limits. Together with Social Security's cost-of-living adjustment (COLA), they add up to five changes worth knowing about. Here they are at a glance.

• The 401(k) limit rises to $25,500.
• The IRA limit stays at $7,500, but income limits are increasing.
• Savers ages 60 to 63 can put up to $37,250 into a 401(k).
• More people can claim the Saver's Credit.
• Social Security checks will rise 3.6%.

Here's what each one means for you.

1. A higher 401(k) limit

You'll be able to contribute up to $25,500 to a 401(k), 403(b), governmental 457 plan, or the federal Thrift Savings Plan in 2027, up from $24,500 in 2026. If you're 50 or older, the catch-up contribution rises to $8,500 from $8,000, so you can save up to $34,000 in total. Savers in their early 60s can put away even more, which I'll get to in a moment.

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Workers with a SIMPLE IRA through a small employer get a raise, too. That limit rises from $17,000 to $17,500. It's also worth noting that these limits apply only to your own contributions. Your employer's matching contributions don't count toward them, so a higher limit means more room to save before you hit the cap.

2. More people can deduct IRA contributions or use a Roth

The IRA contribution limit stays at $7,500 for 2027, and the extra catch-up for savers 50 and older remains $1,100. What's changing is how many people get the IRA's full tax benefits

If you're covered by a retirement plan at work, your ability to deduct traditional IRA contributions phases out as your income rises, and those income ranges are moving higher. For single filers, the phase-out range rises to $83,000 to $93,000, up from $81,000 to $91,000. For married couples filing jointly, where the contributing spouse has a workplace plan, the limits rise to $133,000 to $153,000, up from $129,000 to $149,000.

The Roth IRA income limits are going up, too. Single filers can make a full contribution with income below $158,000, up from $153,000, and eligibility phases out completely at $173,000. For married couples filing jointly, the phase-out range rises to $250,000 to $260,000, up from $242,000 to $252,000. If your income was just over either limit this year, you may qualify in 2027.

3. A bigger catch-up for ages 60 to 63

Workers aged 60 to 63 get an extra-large catch-up contribution. It rises to $11,750 in 2027, up from $11,250, so these savers can contribute up to $37,250 to a 401(k). If you're in that window, it's one of the best chances you'll get to catch up on retirement savings.

4. More people can claim the Saver's Credit

The Saver's Credit is a tax credit for low- and moderate-income workers who contribute to a retirement account, and its income limits are rising.

For 2027, married couples filing jointly can qualify with income up to $83,000, up from $80,500. Heads of household can qualify with income up to $62,250, up from $60,375, and single filers up to $41,500, up from $40,250. Unlike a deduction, a credit cuts your tax bill dollar for dollar, so it's worth checking if you're near those limits.

5. A 3.6% Social Security raise

Social Security benefits will rise 3.6% starting in January, the largest increase since 2023. The average retired worker's check will grow from $2,095 to $2,170 a month, and the average retired couple's from $3,238 to $3,355. To estimate your own raise, simply multiply your current benefit by 3.6%. A $2,000 monthly check, for example, would rise by $72.

Of course, Medicare will take back part of that raise for most retirees, since Part B premiums come straight out of Social Security checks for most beneficiaries 65 and older. The standard premium is $202.90 a month in 2026, and Medicare's trustees have projected $209.50 for 2027, although it isn't official yet, as of this writing.

The bottom line

In short, 2027 gives most workers a little more room to save for retirement, and gives retirees a bigger raise than they got this year. If you're still working, now is a good time to proactively increase your 401(k) contribution so the new limit is reflected by January. And if you're retired, plan your budget around your Social Security raise after Medicare, not the headline 3.6%.

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