New enhancements for Retirement contributions are coming! These are designed to benefit older workers, providing opportunities to bolster retirement funds as they approach retirement age.
What Are Catch-Up Contributions?
Catch-up contributions are additional amounts individuals aged 50 and older can contribute to their retirement accounts beyond the standard annual limits. For 2025, the standard contribution limit for 401(k), 403(b), and most 457 plans is $23,500. Individuals aged 50 and above can contribute an extra $7,500, totaling $31,000 for the year .(Schwab Brokerage)
Enhanced Contributions for Ages 60–63
A notable change in 2025 is the introduction of a "super" catch-up contribution for individuals aged 60 to 63. This group can contribute an additional $11,250, allowing for a total of $34,750 in contributions for the year . This enhancement aims to assist those nearing retirement in accelerating their savings.(Schwab Brokerage, Schwab Brokerage)
Upcoming Changes in 2026
Starting in 2026, as mandated by the SECURE 2.0 Act, high-income earners (those earning over $145,000 in the previous year) will be required to make catch-up contributions to Roth accounts, meaning contributions will be made with after-tax dollars, though qualified withdrawals in retirement will be tax-free . This change emphasizes the importance of planning and understanding the tax implications of retirement contributions.(Schwab Brokerage)
Eligibility and Action Steps
If you're aged 50 or older, you're eligible for standard catch-up contributions. Those between 60 and 63 can take advantage of the enhanced limits in 2025. If you are wondering how this could benefit or affect your cash flow, give us a call and we’d be happy to walk through it.(Schwab Brokerage)
By staying informed and proactive, you can make the most of these opportunities.