Some Savers Can Now Take Advantage of the ‘Super Funding’ Limit for 401(k) Plans: Do You Qualify?
Written by
Jordan Rosenfeld
Edited by
Molly Sullivan
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If you’ve been wishing you could put more money into retirement accounts to reap the tax benefits, 2025 might be your year — and you still have months left to take advantage. This year, certain 401(k) savers, those ages 60 to 63, can take advantage of a new “super catch-up” contribution limit, which allows for them to contribute up to $11,250 in catch-up contributions.
That’s significantly higher than the standard $7,500 catch-up limit for those ages 50 and older. This change, introduced by the SECURE 2.0 Act, is a way for people in their early 60s to bolster their retirement savings in their higher earning years.
Understanding the New Limits
In 2025, the standard employee deferral limit for 401(k) plans has increased to $23,500. Individuals ages 50 and above can make an additional catch-up contribution of $7,500, bringing that total to a juicy $31,000. For those ages 60 to 63, the catch-up contribution limit rises to $11,250, allowing a whopping $34,750.
Eligibility Criteria
To qualify for the enhanced catch-up contribution, you just need to be between ages 60 and 63 at any point during the 2025 calendar year. It’s important to note, however, that this provision is optional for employers, meaning not all retirement plans may offer this increased limit — though about 93% of plans are doing so.
Consult your plan administrator at your employer.
Employer Adoption and Participation Rates
While the enhanced catch-up contributions are a great way for Americans to beef up their retirement plans, not everyone is taking full advantage. According to Vanguard’s “How America Saves 2024” report, only 15% of eligible employees utilized catch-up contributions in 2023. Unsurprisingly, higher participation rates were reported among higher-income earners, with 55% of those earning over $150,000 taking advantage of catch-up contributions.
Americans at every income level need to remember that even a small amount adds up quickly over time due to the power of compound interest and the market’s time-tested history of returns.
Saving Strategies
In addition to this catch up, financial advisors recommended a strategic approach to maximizing retirement savings:
- Maximize Employer Match: Always contribute the maximum to your 401(k) to receive the full employer match.
- Consider Roth IRAs: Especially for younger folks, consider contributing to a Roth IRA as well, for tax-free withdrawals in retirement.
- Utilize Health Savings Accounts (HSAs): If eligible, contribute to an HSA for additional tax-advantaged savings.
- Leverage Super Catch-Up Contributions: If ages 60 to 63 and your plan allows, take advantage of the increased catch-up limit to boost your retirement savings.
It’s also important to note that starting in 2026, high-income earners (those earning over $145,000) will be required to make catch-up contributions on a Roth basis, meaning contributions will be made with after-tax dollars.
Don’t Miss Out
The “super catch-up” contribution gives people ages 60 to 63 a real shot at enhancing their retirement savings in a big way. Speak to your financial advisor to be sure you understand eligibility criteria and make strategic planning contributions to prepare you for a financially secure retirement.
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