If you’re between the ages of 60 and 63, there’s a new opportunity to boost your retirement savings starting in 2025. Thanks to changes in the SECURE 2.0 Act, retirement plans that allow catch-up contributions will now let you contribute even more during these key years before retirement.
If you’ve ever felt like you’re running out of time to save, this is your chance to make up for lost ground. Here’s what you need to know about the ‘super’ catch-up contributions and how they can help you build a stronger financial future.
What Are Catch-Up Contributions?
Normally, there’s a limit to how much you can contribute to a retirement plan like a 401(k), 403(b), or 457(b) each year. But if you’re over 50, the IRS allows you to contribute extra, known as a catch-up contribution. This rule was designed to help older workers put away more money as they get closer to retirement.
Currently, anyone 50 and older can contribute an extra $7,500 per year on top of the regular 401(k) limit of $23,000.
But starting January 1, 2025, if you’re 60, 61, 62, or 63, you’ll be able to contribute even more – up to $11,250 in additional catch-up contributions. This is what’s being called the ‘super’ catch-up.
How Much Can You Contribute?
With this new rule, someone who is 60-63 years old in 2025 can contribute a total of $34,250 to their 401(k) (the regular $23,000 limit + $11,250 super catch-up contribution).
The amount you can contribute will also increase starting in 2026, as these limits will now be adjusted for inflation each year. This means even bigger savings opportunities in the future.
Who Does This Apply To?
This extra savings boost only applies to people who are 60, 61, 62, or 63 by the end of the calendar year. Once you turn 64, the catch-up limit goes back to the standard $7,500. If you’re under 60, you’ll still have access to the regular catch-up contribution of $7,500, but not the ‘super’ catch-up.
Why This Matters for Your Retirement
If you’re approaching retirement and feel like you need to save more, this is a great opportunity to increase your retirement contributions without going over IRS limits. By maxing out this extra contribution, you can build up your retirement funds faster and potentially lower your taxable income for the year.
For those who have had gaps in saving, whether due to career changes, financial hardships, or other life events, this gives you a way to catch up before you stop working.
Important Considerations for High Earners
If you earn more than $145,000 per year, there’s another rule to keep in mind. Starting in 2026, all catch-up contributions (including the new ‘super’ catch-up) must be made to a Roth 401(k) instead of a traditional 401(k).
This means you’ll pay taxes on the contributions now, but your money will grow tax-free and you won’t owe taxes when you withdraw it in retirement. While this could be a great advantage for many, it’s important to plan ahead and talk with a CPA about how this will affect your overall tax situation.
How to Maximize This Opportunity
If you’re in this age group, now is the time to start planning. Here’s what you can do to make the most of the ‘super’ catch-up contributions:
- Review Your Retirement Savings: Take a close look at how much you’re currently saving and whether you can afford to increase your contributions in 2025.
- Adjust Your Payroll Contributions: Work with your HR department to update your 401(k) elections so you’re contributing the maximum allowed.
- Plan for Tax Implications: If you’re a high earner, consider how shifting to a Roth 401(k) in 2026 will impact your tax bill.
- Talk to a CPA or Financial Advisor: A tax professional can help you make the smartest moves for your long-term financial health, whether that’s adjusting your savings strategy or balancing other financial goals.
Get Expert Help with Your Retirement Strategy
If you’re between 60 and 63 and want to take full advantage of these new retirement savings rules, Harper & Co. is here to help. We’ll guide you through the tax implications to help you stay on track for the retirement you deserve.
If you’re ready to plan your best financial future… Give us a call anytime at (614) 456-7222.
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