Catching up just got easier for some retirement investors. Starting in 2025, a subset of older 401(k) plan participants can make even higher catch-up contributions. Secure Act 2.0 (Section 603) increases the catch-up contribution limit for those participants who are age 60, 61, 62, or 63 (but not age 64).
This new “super” catch-up contribution will now require an employer or their plan recordkeeper to not only track participants that are age 50-plus (i.e., the age 50 catch-up contribution limit) but also those participants that will attain ages 60, 61, 62, or 63 during the calendar year to ensure that the new increased deferral limit is applied as well.
Furthermore, plans will also need to track those participants who reach age 64, and therefore are no longer eligible for the super catch-up, and who will, once again, be subject to the age 50 catch-up limit. In other words, the increased catch-up limit will revert to the generally applicable “age 50” limits beginning with the taxable year in which the eligible participant attains age 64. Therefore, determining the eligible participants’ maximum catch-up contribution limit adds layers of complexity for plans and eligible participants come 2025.
Keep in mind that workplace retirement plans and SIMPLE IRAs don’t have to offer age 50 catch-ups. If yours doesn’t, then the new special catch-up for ages 60-63 won’t be available.
How much is the Super catch-up for 2025?
Currently, a participant in a 401(k), 403(b), governmental 457(b) plan, or SIMPLE IRA who attains age 50 by the end of a calendar year can make catch-up contributions in excess of the regular deferral limit. Starting in 2025, participants who turn age 60, 61, 62, or 63 (not age 64) by the end of a year will be able to make an additional contribution for that year.
For example, George, age 59, is due to turn 60 on December 31, 2025. George is eligible for the increased catch-up in 2025—even though he is “only” age 59 when making such deferrals.
401(k), 403(b) and Governmental 457(b) plans
- The 401(k), 403(b), and governmental 457(b) super catch-up applies to eligible plan participants who are between the ages of 60 and 63. The deferral limit is the greater of $5,000 or 150% of the normal “age 50” catch-up contribution limit for 2025 ($7,500). Thus the 2025 “super” catch-up equals $11,250 (150% x $7,500). This limit will be indexed for inflation starting in 2026.
SIMPLE IRAs
- The SIMPLE IRA super catch-up applies to eligible account owners who are between the ages of 60 and 63. The deferral limit is the greater of $5,000 or 150% of the 2025 regular “age 50” catch-up limit for SIMPLE IRAs ($3,500). Thus the 2025 “SIMPLE IRA “super” catch-up equals $5,250 (150% x $3,500). This limit be indexed for inflation starting in 2026.
Example: Tony is employed by Life’s a Dream Inc. where he is a participant in the 401(k) plan. Tony’s 60th birthday is December 15, 2025. Tony can elect to make the increased catch-up contribution (in 2025) up to $11,250. When considering the “normal” salary deferral contribution limit for 2025 of $23,500, Tony can defer a total of $34,750 ($23,000 + $11,250).
