Retirement planning just got a boost for those aged 60 to 63. A new rule, starting in 2025, allows you to save more during these crucial years. Here’s a quick guide.
What Are Catch-Up Contributions?
Catch-up contributions let older workers save extra in their retirement accounts. Traditionally, anyone 50 or older can contribute more to plans like 401(k)s or 403(b)s. The regular contribution limit for 401(k), 403(b), and most 457 plans in 2025 is $23,500, and the regular catch-up contribution limit for those 50+ is $7,500, allowing them to contribute up to $31,000 in total.
What’s New for Ages 60-63?
From 2025, if you’re 60, 61, 62, or 63, you can contribute even more:
$11,250 (adjusted for inflation starting in 2026), or
150% of the regular catch-up amount for those 50+.
This means you can significantly boost your retirement savings in these years, with a total contribution of up to $34,750 in 2025.
Roth Requirement for High Earners (Starting in 2026)
Beginning in 2026, if you earn over $145,000 (adjusted for inflation), your extra contributions must go to a Roth account. Roth contributions are after-tax but grow tax-free.
Why This Matters
Catch up on savings Great if you started saving late.
Build a bigger nest egg Helps cover future expenses.
Save on taxes Making pre-tax contributions lowers your taxable income now, helping you save on taxes while boosting your retirement savings.
What to Do Now
Review your savings strategy Determine if you're on track for retirement.
Maximize contributions Take advantage of both the standard and new catch-up contribution options.
Stay updated Contribution limits may increase annually due to inflation adjustments.
This new rule is a big opportunity for those nearing retirement. At Alpha Financial Management, we’re ready to help you make the most of it. Contact us to start planning today.
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