Retirement savers older than 50 have long been able to make special “catch-up” contributions higher than the standard limit for annual deferrals into tax-advantaged accounts like 401(k)s. In 2025, that ability has been supercharged for savers between the ages of 60 and 63, thanks to rule changes created by the Secure 2.0 Act.
As detailed in an analysis shared with ThinkAdvisor by the Colcom Group, a consulting firm, clients approaching the traditional retirement age can give their retirement savings a significant boost late in the game — either to help them reach an underfunded savings goal or to create room for higher discretionary spending during life after work.
For 2025, the maximum pretax amount that individuals may contribute to an employer’s plan is $23,500, plus $7,500 in standard catch-up contributions for those who have reached 50. If age 60 is attained, however, people can instead make catch-up contributions up to the greater of $10,000 or 150% of the standard age 50-plus catch-up limit. For 2025, the standard catch-up limit of $7,500 means that the increased limit for ages 60 to 63 is $11,250.
This framework gives clients a four-year window to meaningfully bolster their savings before retirement. Between the normal contribution and the 60-63 bonus, clients can put away some $42,250 per year (at the 2025 limits). That’s a potential $139,000 in total accumulated pretax savings during the 60-63 window — a number that will likely grow as inflation adjustments are made to the standard savings limits.
Notably, these increased savings limits are subject to a number of regulatory complexities, including the need for higher-income earners to make any catch-up contributions to Roth-style accounts. Employers aren’t required to allow them, either. But, assuming that they are available, it is a good idea to plan ahead, according to the Colcom analysis. Working with their advisors, clients can review their current budget against long-term goals to determine if they can make room to increase their contributions when the time comes.
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