Maximizing savings is at the top of the financial to-do list for most people nearing retirement. For the 60 to 63 age group, the IRS has introduced a “super catch-up” under the SECURE 2.0 Act of 2022, allowing you to further maximize your retirement savings starting in 2025.
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The super catch-up allows those between the ages of 60 and 63 to contribute an additional $11,250 to eligible retirement plans, such as government 401(k)s, 403(b)s and 457 plans. This is in addition to the standard annual contribution limit of $23,500 for 2025 and the catch-up limit of $7,500 for those over 50. In total, savers in this age group can contribute up to $34,750 per year, provided their plan supports this option.
Notably, the higher contribution amount will not be in addition to the regular catch-up limit of $7,500, but will replace it for those in the eligible age range. Christine Benz out Morning star notes: “If your plan does not yet allow such contributions, ask your plan administrator if there are plans to do so.”
For those who feel they have fallen behind on retirement savings, the super catch-up offers a unique opportunity to catch up.
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Depending on your financial strategy, contributions can be made to traditional pre-tax or Roth accounts. Traditional accounts provide an immediate tax benefit, while Roth accounts allow tax-free withdrawals in retirement.
The super catch-up only applies to people who are 60 and 63 years old at the end of the calendar year. Future contribution limits will be indexed to inflation, providing continued opportunities to adapt to rising costs.
It is important to confirm that your employer-sponsored plan offers the super catch-up feature. If not, now might be the time to advocate for plan updates.
Trending: Many use this retirement income calculator to check if they’re on track – here’s an overview of what’s behind this formula.
If you’re already maximizing contributions to your business plan, you may want to explore additional savings options:
