Understanding the Super Catch-Up Contribution for 401(k) and 403(b) Plans
Retirement planning is a lifelong journey, and for those nearing retirement, maximizing contributions to tax-advantaged accounts is a critical strategy.
Fortunately, beginning in 2025, a new provision known as the Super Catch-Up Contribution will allow employees aged 60 to 63 to significantly boost their retirement savings through their 401(k) and 403(b) plans. This provision, introduced under the SECURE 2.0 Act, offers a unique opportunity for older workers to enhance their financial security in their final working years.
What Is the Super Catch-Up Contribution?
The Super Catch-Up Contribution is an enhancement of the existing catch-up contribution rules for employer-sponsored retirement plans like 401(k) and 403(b) accounts. Currently, employees aged 50 and older can make catch-up contributions above the standard contribution limit. In 2024, the catch-up contribution limit is $7,500. However, starting in 2025, the Super Catch-Up Contribution will allow employees aged 60 to 63 to contribute even more.
Under the new rule, the Super Catch-Up Contribution will be the greater of:
150% of the regular catch-up contribution limit for that year, or
$10,000 (adjusted for inflation after 2025)
For example, this year, the catch-up contribution limit remains at $7,500 in 2025. Therefore, eligible employees will be able to contribute up to $11,250 ($7,500 x 150%) as their Super Catch-Up Contribution.
Who Qualifies for the Super Catch-Up Contribution?
To take advantage of this provision, you must:
Be between the ages of 60 and 63 (inclusive) in the calendar year of contribution.
Participate in a 401(k), 403(b), or similar employer-sponsored plan.
Have already maximized your standard contribution limits for the year.
Important Considerations
Beginning in 2026, Required Roth Contributions for High Earners – If your wages exceed $145,000 (indexed for inflation) in the previous year, your catch-up contributions, including the Super Catch-Up, must be made to a Roth account within your plan. This means your contributions will be made with after-tax dollars, but your withdrawals in retirement will be tax-free.
Time-Limited Benefit – The enhanced contribution limit is only available to those between 60 and 63. Once you turn 64, you revert to the standard catch-up contribution limits.
Employer Plan Rules Apply – Not all employer plans may immediately implement these changes, so employees should verify with their HR or benefits administrator. If you do wish to pursue this strategy, reach out to your employer to make sure they allow this and to see if anything else needs to be done on their end to ensure you are contributing this super catch up contribution.
Why Take Advantage of the Super Catch-Up Contribution?
Accelerate Retirement Savings: This provision allows late-stage savers to significantly boost their nest egg, especially if they started saving later in life.
Maximize Employer Contributions: Some employers match a percentage of contributions, making it even more beneficial to contribute the maximum allowable amount.
The Super Catch-Up Contribution provides a valuable opportunity for individuals in their early 60s to supercharge their retirement savings. If you’re approaching this age bracket, now is the time to start planning how to take full advantage of these enhanced contribution limits. Consult with a financial advisor or your plan administrator to ensure you’re maximizing your benefits under this new rule.
By strategically using these higher limits, you can move closer to a financially secure retirement, giving yourself greater peace of mind as you transition into the next phase of life.
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