We are writing to share important updates regarding recent changes to retirement savings rules under the SECURE Act 2.0, which may help you maximize your retirement contributions—especially if you are approaching retirement age.
Super Catch-Up Contribution for Ages 60–63
Starting January 1, 2025, individuals who turn 60, 61, 62, or 63 at any time during the year are eligible for a “Super Catch-Up” contribution to their workplace retirement plans. This enhanced catch-up contribution allows you to contribute significantly more than the regular catch-up available to those ages 50–59 and 64 or older.
Key Details:
- Who Qualifies: Anyone who is age 60, 61, 62, or 63 at any point during 2025.
- Contribution Limit:
- 401(k), 403(b), and governmental 457(b): Up to $11,250 in catch-up contributions (the greater of $11,250 or 150% of the standard age 50+ catch-up limit for 2025).
- SIMPLE IRA and SIMPLE 401(k): Up to $5,250 in catch-up contributions (the greater of $5,250 or 150% of the standard age 50+ SIMPLE catch-up limit for 2025).
- Plan Types: Applies to 401(k), 403(b), governmental 457(b), SIMPLE IRA, and SIMPLE 401(k) plans that offer catch-up contributions.
- Duration: The higher limit is available only for the years you are ages 60, 61, 62, or 63. Once you turn 64, the standard catch-up limits apply ($7,500 for 401(k)/403(b)/457(b); $3,500 for SIMPLE plans).
- Employer Option: This enhanced catch-up is optional for employers. Please check with your plan administrator to confirm if your workplace plan will offer this feature.
2025 Annual Contribution Limits:
Why This Matters
These changes are designed to help those nearing retirement maximize their savings and potentially lower their taxable income during these critical years. If you or your spouse will be in this age range in 2025, you have a valuable opportunity to boost your retirement savings before leaving the workforce.
If you have questions about how these changes affect your specific situation or would like to discuss your retirement tax strategy, contact our office to schedule a consultation
Best regards,
Abeles and Hoffman, P.C.
