Supercharge Your Retirement Savings in 2025: Introducing the “Super Catch-Up”

A significant update from the SECURE Act 2.0 is now in effect, offering a powerful new tool for individuals nearing retirement. This provision, known as the “Super Catch-Up” contribution, presents a valuable opportunity to accelerate your savings.

Here’s a straightforward guide to understanding and leveraging this new rule.

What is the “Super Catch-Up” Contribution?

Effective this year, a special provision of the SECURE Act 2.0 allows individuals within a specific age range to contribute more to their retirement plans than the standard catch-up limit. This “super catch-up” is designed to help those approaching retirement to bolster their savings in their final working years.

This applies to several common retirement plans, including 401(k), 403(b), and 457(b) plans, as well as SIMPLE IRA plans. The core change is simple: you can put more money away for your future.

Who is Eligible?

Eligibility for the super catch-up is based on your age in 2025. You are eligible if you are turning 60, 61, 62, or 63 this year.

It’s important to note the precise age window. If you are turning 59 or 64 in 2025, you are not eligible for this specific increase and will follow the standard catch-up contribution rules.

Breaking Down the New Contribution Limits for 2025

Let’s look at the numbers to see how this enhances your savings potential:

• Standard Catch-Up (Age 50+): As in previous years, participants aged 50 and over can contribute an additional $7,500 on top of the standard $23,500 deferral limit for 2025.
• Super Catch-Up (Ages 60-63): For eligible participants, the catch-up contribution limit increases to $11,250. This is a $3,750 increase over the standard catch-up, allowing for a significantly larger contribution to your retirement account.

For those with a SIMPLE IRA plan, the super catch-up limit is the greater of $5,000 or 150% of the regular catch-up limit.

What Do You Need to Do?

• Eligible participants who wish to take advantage of the higher limit can simply adjust their contribution amount and submit the updated deferral election to their payroll department.
• Participants outside of the 60-63 age bracket will continue to be subject to the standard $7,500 catch-up limit.

This new provision is a good opportunity to maximize your retirement savings as you approach your financial goals.

Questions? Contact us today to review your contribution levels and ensure you are taking full advantage of the new “Super Catch-Up” provision for 2025.