IRS announces 2027 401(k) contribution limits, raises savings cap: What it means for your money

The article says the IRS has announced higher 401(k) contribution limits for 2027, giving workers who can afford to save more room to put money aside for retirement. It also stresses that the higher cap may matter less to many people than making sure they receive their full employer match.

Vanguard found that 14% of participants maxed out their 401(k) in 2025, while the average savings rate including employer contributions was 12.1%. Fidelity found that about 19% of employees in its second-quarter 2026 analysis were not contributing enough to receive their full match. Vanguard recommends saving 12% to 15% of pay annually, including employer contributions; workers aiming for the new cap are advised to update their rate in December, as changes can take one or two pay periods to take effect.