New 401(k) Catch-Up Opportunities to Power Your Savings
Retirement plans are in for some helpful updates, thanks to the SECURE 2.0 Act. If you're 50 or older, you might already know about catch-up contributions. These let you add extra money to your 401(k) on top of the usual yearly limit. It's a smart way to build up your savings as retirement nears. Two big changes are coming soon to make saving even easier.
Super Catch-Up for Ages 60–63
Starting January 1, 2025, if you're turning 60, 61, 62, or 63 that year, you can save even more.
The new "super catch-up" amount will be the bigger of:
- $10,000, or
- 150% of the standard catch-up limit for that year (which is $7,500 in 2025, so 150% equals $11,250).
This boost helps folks in their early 60s ramp up savings right before they retire.
Roth Catch-Up for High Earners
Beginning in 2026, if you made more than $145,000 in wages the year before (this number will adjust each year for rising costs), your catch-up contributions must go into a Roth account.
Roth means you pay taxes on the money now, but your withdrawals in retirement come out tax-free.
High earners won't be able to use pre-tax catch-ups anymore. If your plan doesn't offer Roth options, you might not be able to make catch-ups at all.
Why These Changes Matter
- For workers in their early 60s: The super catch-up lets you add thousands extra to your nest egg each year.
- For higher earners: It shifts when you pay taxes - up front now, but tax-free later in retirement.
- For employers and plan sponsors: You'll need to update plans to include Roth catch-ups. Without that, high earners could miss out on these extras.
These rules aim to help everyone save more, while nudging wealthier savers toward Roth accounts for long-term tax perks.
Key Takeaways
2025: Super catch-up kicks in for ages 60–63 (up to $11,250 that year).
2026: Roth catch-ups become mandatory for those earning over $145,000 the prior year.
Overall, these tweaks make it simpler to catch up on savings and enjoy tax breaks down the road.
Final Note
If retirement is on your horizon or you're wondering if you're on track to save enough, give us a call. We're happy to help build a custom plan around your goals. A solid strategy today can mean more money saved - and more money in your pocket - tomorrow.