The same inflation that has pushed the Federal Reserve back into hiking mode is quietly handing retirement savers a bigger tax-advantaged bucket for 2027 — and the figure most widely circulating online is already out of date.
Milliman's latest actuarial forecast, published Sept. 11, projects the 2027 employee elective deferral limit for 401(k), 403(b) and 457 plans at $25,500, a $1,000 increase from the $24,500 the IRS confirmed for 2026. The regular age-50 catch-up contribution is projected at $8,500, up $500, with the "super catch-up" for savers turning 60 to 63 rising to $11,750.
Why the Widely Quoted Numbers Are Stale
Search results and aggregator sites still routinely cite a $25,000 deferral limit with the catch-up frozen at $8,000 — figures from an earlier spring edition of the same forecast. For a saver over 50, the difference between the stale pairing and Milliman's current projection is $1,500 of annual tax-advantaged room.
The gap exists because IRS limits are indexed to inflation and then rounded down to the nearest $500. A projection can sit just beneath a threshold for months, looking frozen, until a single hot CPI reading carries it across.
Milliman's current edition is built on actual trailing CPI-U of 3.4% for the 12 months ended Aug. 31, 2026. Other 2027 figures in the forecast:
- Maximum annual addition (415(c)): $75,000, up from $72,000
- Annual compensation limit: $375,000, up from $360,000
- Highly compensated employee threshold: $170,000, up from $160,000
One Data Release Decides It
The projections are not final. Milliman cautions that "it is possible that some of the limits may shift over the next month," and spells out the tipping point: if September CPI rises less than 0.04%, the deferral limit slips back to $25,000 and the catch-up stays at $8,000.
That outcome looks unlikely. August CPI, released Sept. 11 by the Bureau of Labor Statistics, rose 0.4% on the month and 3.4% over the year, with core prices up 0.3% monthly and 2.4% annually. A near-zero September print would be a sharp break from that trend, particularly with energy costs still elevated.
September CPI is scheduled for Oct. 14 at 8:30 a.m. ET. The IRS typically confirms official limits in late October or early November — the 2026 figures arrived Nov. 13, 2025, in release IR-2025-111.
Bigger Caps Meet an Already-Strong Savings Cycle
Higher limits land on a participant base that is already contributing at record rates. Fidelity's second-quarter 2026 analysis put the average 401(k) balance at $155,800, up 13.1% year over year, with total savings rates holding at 14.4% and the count of 401(k) millionaires reaching 769,000. Millennial balances averaged $94,300.
The policy backdrop is less comfortable. The FOMC raised its benchmark 25 basis points this month to a 3.75%–4% target range, and CME FedWatch odds of another increase at the Oct. 27–28 meeting jumped to 73% following hot inflation data and comments from Fed Governor Michael Barr, CNBC reported Sept. 23. Equities were steadier Friday, with the Dow up about 0.3% as Brent crude eased toward $105.
For savers, the practical takeaway is narrow but useful: plan contribution elections for 2027 against $25,500, and treat $8,500 as the likely catch-up — while noting nothing is official until the IRS says so.
Sources: Milliman ("2027 IRS Limits Forecast"), U.S. Bureau of Labor Statistics (Consumer Price Index, August 2026), Internal Revenue Service (IR-2025-111), CNBC, Fidelity Investments Q2 2026 Retirement Analysis