If you between the ages of 60-63 in 2025 you may be eligible for a “super catch-up contribution” this year.
If you between the ages of 60-63 in 2025 you may be eligible for a “super catch-up contribution” this year.
Current Catch-Up Contribution Limits
For individuals aged 50 and older, the Federal government allows additional contributions to both IRAs and workplace retirement plans like 401(k)s. In 2025, these limits will be:
These enhanced contribution limits provide a valuable opportunity for those in their peak earning years to make up for any earlier shortfalls in their retirement savings.
The SECURE Act 2.0 and “Super Catch-Up” Contributions
Thanks to the 2022 SECURE Act 2.0, starting in 2025, individuals between the ages of 60 and 63 will have access to an even greater savings opportunity: “super catch-up” contributions. This provision allows eligible participants to make total catch-up contributions of up to $11,250 to workplace retirement plans. This amount is $3,750 more than the standard catch-up contribution, for a total possible contribution of $34,750 to workplace plans.
However, it’s essential to note that not all workplace plans may offer the “super catch-up” option. You should check with your plan administrators to confirm whether this provision is available.
Rothification of Catch-Up Contributions: A Delay Until 2026
Another key change introduced in SECURE Act 2.0 involves the “Rothification” of catch-up contributions for high earners. Specifically, individuals with wages exceeding $145,000 (adjusted for inflation) from the employer sponsoring the retirement plan would be required to make these contributions on a Roth (after-tax) basis.
However, this requirement has been delayed until 2026, giving individuals making catch-up or “super catch-up” contributions in 2025 the option to allocate these funds as traditional (pre-tax) or Roth contributions. This delay offers greater flexibility for individuals to choose the contribution style that aligns best with their financial strategies.
Why Catch-Up Contributions Matter
The availability of “super catch-up” contributions is particularly attractive for those who have the financial capacity to maximize their retirement savings in these critical years. For example, a couple where both partners are eligible for “super catch-up” contributions could contribute nearly $70,000 in total to their workplace plans in 2025. This level of contribution can make a significant difference in retirement readiness.
Here how you can determine if they are right for you:
The Bottom Line
Catch-up contributions offer a valuable opportunity for individuals nearing retirement to strengthen their financial foundation. By staying informed about evolving contribution limits and provisions like the “super catch-up” option, you can make the most of your remaining working years.
Need help figuring out if these catch-up contributions make sense for you? Give us a call at 610-825-3540 and ask for an advisor.
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