This week brought a mix of welcome news and a few reminders that the economy is still running hot. The IRS announced the 2027 401(k) limits and other retirement contribution figures, giving savers a little more room next year. At the same time, October’s inflation report came in warmer than expected and pushed the 10-year Treasury yield back above 5%. And with Medicare open enrollment closing in a few weeks, the clock is ticking on your 2027 coverage choices. Here’s what happened, and how we’re thinking about it.
The IRS sets the 2027 401(k) limits
On November 12, the IRS announced that the amount you can contribute to a 401(k), 403(b), most 457 plans and the federal Thrift Savings Plan will rise to $25,500 in 2027, up from $24,500 this year. The standard catch-up contribution for savers age 50 and older increases to $8,500, from $8,000, so most people 50 and over can put away up to $34,000. If you’ll be 60, 61, 62 or 63 in 2027, the higher “super catch-up” rises to $11,750, according to the Journal of Accountancy. IRA contribution limits stay at $7,500, with the age-50 catch-up unchanged at $1,100, while the income ranges for Roth IRA eligibility and traditional IRA deductions move higher.
What this means for you: If you’re still working, especially in your 60s, these higher limits are one of the most effective ways to build savings while lowering your taxable income. It’s worth checking your payroll deferral now so the new amount takes effect in January rather than being left on the table. If you’re already retired, the higher Roth IRA income ranges may matter if you or a working spouse still have earned income. As always, whether pre-tax or Roth contributions make more sense depends on your current bracket compared with what you expect in retirement, and that’s a conversation worth having with your advisor and tax professional.
October inflation ran warmer than expected
The Bureau of Labor Statistics reported on November 10 that consumer prices rose 0.4% in October, after a 0.6% jump in September. Core prices, which exclude food and energy, rose 0.3% for the third month in a row. Yahoo Finance noted that economists had expected 0.3% and 0.2%, respectively. Groceries were a notable driver: food at home rose 0.4%, with beef, dairy and produce all climbing, and medical care costs rose 0.3%. One unusual wrinkle: the BLS could not publish the usual year-over-year inflation rate, because it did not collect price data in October 2025 during last year’s government shutdown.
What this means for you: Rising grocery and medical costs hit retirees especially hard, since those categories make up a larger share of a typical retirement budget. Next year’s 3.6% Social Security cost-of-living adjustment helps, but it’s a good time to revisit your spending plan and make sure your income sources are keeping pace. A diversified mix that includes assets with the potential to grow over time remains an important hedge against inflation over a long retirement.
The 10-year Treasury yield climbed back above 5%
Bond markets reacted quickly to the inflation report. The 10-year Treasury yield, which started the week near 4.9%, rose past 5% after the CPI data and reached 5.10% on Thursday, its highest level since October, according to Yahoo Finance. The hot report also firmed up traders’ expectations that the Federal Reserve will raise short-term interest rates at its December 8-9 meeting. On Friday, a separate report showed wholesale prices rose 0.3% in October, slightly less than expected.
What this means for you: Higher yields cut both ways. If you’re adding to bonds, CDs or Treasuries, today’s rates offer income levels that savers haven’t seen for much of the past 15 years. On the other hand, rising yields can weigh on the value of bonds you already own and keep mortgage and borrowing costs elevated. Rather than trying to predict the Fed’s next move, we’d focus on whether your bond holdings and cash reserves are matched to when you’ll actually need the money.
Medicare open enrollment ends December 7
Medicare’s annual open enrollment period runs through December 7, and any changes you make take effect January 1. If you do nothing, you’ll generally stay in your current plan, as long as it’s still offered. As of November 11, the Centers for Medicare & Medicaid Services had not yet released the 2027 Part B premium and deductible, which it typically announces in mid-November; the 2026 standard premium is $202.90 a month. For 2027, the out-of-pocket cap on covered Part D prescription drugs rises to $2,400.
What this means for you: Plans change their premiums, drug lists and provider networks every year, so a plan that fit you well in 2026 may not be the best choice for 2027. Take a few minutes to compare your options on Medicare.gov’s Plan Finder before the deadline. Also be cautious about unsolicited calls or texts about Medicare during enrollment season; Medicare won’t call you to sell a plan or ask for your Medicare number. If you missed our recent Medicare 101 for 2027 webinar, it’s a helpful refresher. And remember that higher-income retirees pay more for Part B and Part D through IRMAA surcharges, which are based on your tax return from two years earlier, so income planning today can affect your premiums down the road.
The bottom line
New contribution limits, stubborn inflation, higher yields and an approaching Medicare deadline all point to the same idea: the end of the year is a natural time to check in on your plan. If you have questions about how any of this affects you, your Level advisor is always happy to talk it through.
Sources
- 401(k) Limit Increases to $25,500 for 2027, IRA Limit Remains $7,500 (IRS, Nov. 12, 2026)
- Inflation Adjustments to Retirement Account Limits Issued for 2027 (Journal of Accountancy, Nov. 12, 2026)
- Consumer Price Index, October 2026 (Bureau of Labor Statistics, Nov. 10, 2026)
- ‘Not Great’: October CPI Inflation Rises 0.4% as Food and Rent Costs Spike (Yahoo Finance, Nov. 10, 2026)
- Stock Market Today: Dow, S&P 500, Nasdaq Edge Higher After Wholesale Inflation Grows (Yahoo Finance, Nov. 13, 2026)
- 2027 Medicare Part B Premium: What’s Official and What’s Still an Estimate (USA Benefits Now, Nov. 12, 2026)
This article is for informational purposes only and should not be considered personalized investment, tax or legal advice. Please consult your advisor regarding your specific situation.
