This is an update to the Milliman 2027 IRS Limits Forecast using the U.S. Bureau of Labor Statistics (BLS) report published September 11, 2026.
With the publication of the August 2026 Consumer Price Index (CPI), 11 of this year’s monthly CPI rates are set and only the September 2026 CPI (scheduled for release on October 14, 2026) remains before the final 2027 annual limits are calculated.
Our initial forecast in March 2026 can be found here. It includes information about the limits for qualified retirement plans, how these limits are calculated, and why they may be relevant for certain plan sponsors.
August 2026 forecast
Historical rolling 12-month changes in the CPI as of each September 30 through 2025, and the current trailing 12-month change through August 31 of the current federal fiscal year (FFY), are shown in Figure 1.
Figure 1: Historical 12-month percentage change each September 30 and current trailing 12-month percentage change through August 31, Consumer Price Index, all items, not seasonally adjusted
Source: U.S. Bureau of Labor Statistics.
The CPI as reported by the BLS for the 12 months ended August 31, 2026, was 3.4%, unchanged from the 12 months ended July 31, 2026. It is higher than the 3.0% annual change in the CPI as of September 30, 2025 (i.e., the close of the prior FFY); higher than the 3.2% average annual change over the past 10 years ended September 30, 2025; and higher than the 2.5% average annual change over the past 20 years ended September 30, 2025.
Since September 30, 2025, the CPI has increased about 3.1%. Projecting a monthly increase of 0.25% for September 2026 results in an estimated annual increase factor of 3.4% for our 11-month actual/one-month forecast projection.
Figure 2 shows the forecasted limits. There was no change in the projected limits from July’s forecast.
It is possible that some of the limits may shift over the next month. If the CPI increase in September 2026 is less than 0.04%, the maximum §401(k), §403(b), §457 deferral limit may increase to $25,000 instead of $25,500, and the regular catch-up contribution limit for people ages 50 and older may remain at $8,000 instead of increasing to $8,500. If the CPI increase in September 2026 is greater than 0.35%, the key employee/officer compensation may increase to $245,000.
Please contact your Milliman consultant for details and questions about how these limits apply to your retirement plan(s).
Figure 2: 2027 IRS Limits Forecast using actual FFY 2026 CPI as of August 31, 2026
| Category of annual IRS limits | 2026 IRS limits | Estimated 2027 IRS limits | Dollar increases from 2026 limit |
|---|---|---|---|
| Maximum annual annuity pension for DB plans | $290,000 | $300,000 | $10,000 |
| Maximum annual addition for DC plans | $72,000 | $75,000 | $3,000 |
| Maximum §401(k), §403(b), §457 deferral for DC plans | $24,500 | $25,500 | $1,000 |
| Catch-up contribution limit for DC plans | $8,000 Ages 60 to 63: $11,250 |
$8,500 Ages 60 to 63: $11,750 |
$500 $500 |
| Compensation limit | $360,000 | $375,000 | $15,000 |
| HCE dollar amount | $160,000 | $170,000 | $10,000 |
| Key employee/officer compensation | $235,000 | $240,000 | $5,000 |
| Contribution limit to ESAs for DC plans | $2,600 | $2,700 | $100 |
| Prior-year wage threshold triggering Roth catch-up contributions to DC plans | $150,000 | $155,000 | $5,000 |
| Domestic abuse withdrawal limit | $10,500 | $10,900 | $400 |
Source: https://www.bls.gov/cpi/ retrieved September 11, 2026.
Actual 12-month trailing CPI for All Urban Consumers (CPI-U) of 3.4% ending August 31, 2026.