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When it comes to saving for retirement, setting aside money early in your career is generally the best approach. That money has more time to compound and grow than money you save when you’re older.
But in reality, many people aren’t able to save as much as they need to when they’re young. In fact, 22 percent of Americans said their biggest financial regret was not saving for retirement earlier, according to Bankrate’s Financial Regret Survey.
Fortunately, the government allows you to save more when you’re older through something called catch-up contributions, and in 2025, those aged 60–63 will be able to take advantage of the new 401(k) super catch-up. If you’re not sure if you should participate, it may be worth consulting with a financial advisor who can help you devise a plan based on your individual needs.
Here’s what else you need to know and how to tell if the super catch-up is right for you.
401(k) super catch-up contributions: What you should know
As part of SECURE Act 2.0, passed in late 2022, individuals age 60, 61, 62 or 63 are now allowed to make “super catch-up contributions” to their 401(k) and other retirement plans. These contributions are above the regular catch-up contributions allowed for those age 50 and older. Here’s how it works.
- If you’re age 60–63, you’re eligible for super catch-up contributions in 401(k)s and other eligible retirement plans (403(b), governmental 457 plans, etc.).
- The super catch-up contribution amount is $11,250 for 2025, compared to the regular catch-up contribution amount of $7,500, which is available to those age 50 and older.
- You’re eligible for the super catch-up in the year you turn 60 years old and lose eligibility in the year you turn 64 (you’d still be able to make the regular catch-up contribution).
The new rule allows those who are close to the typical retirement age to boost their savings for four years, potentially somewhat making up for a lack of savings when they were younger.
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401(k) super catch-up contributions: 3 ways to tell if it’s right for you
1. You can afford to make the extra contributions
The first step in deciding whether the super catch-up contributions make sense for you is figuring out if you can afford to make these extra contributions. Remember that these contributions are in addition to the $23,500 that anyone can save in their 401(k) plan for 2025, which means those age 60–63 can save a total of $34,750 ($23,500 + $11,250).
That’s a significant amount of money for most people, and you may not be able to save that much without impacting your lifestyle. Think about what you need to pay expenses and if there’s anything you’re saving for in the next few years. If the super catch-up contribution fits into your budget, it can be a nice way to boost your savings, but it may not be possible for everyone.
2. You need to make the extra contributions
If you’ve determined that you can afford the super catch-up contributions, you’ll want to assess where you’re at in your retirement planning and see if catch-up contributions would help you reach your goal.
It may make sense to sit down with a financial advisor, if you haven’t already, to see if some extra savings would make it more likely that you’ll reach your goal or even surpass it. It may be easier for you to boost your savings later in your career than it was when you were just starting out, so it could be a great opportunity to get back on track.
3. Catch-up contributions fit into your tax planning strategy
Another reason it may make sense to make catch-up contributions is if doing so fits into your tax plan. Increasing your traditional 401(k) contributions lowers your taxable income, which means you pay taxes on a reduced amount.
Even if you don’t urgently need to boost your contributions for retirement, it may still be a worthwhile benefit to lower your tax bill.
Bottom line
Ultimately, whether you make catch-up contributions will depend on your unique financial situation. If you’ve already saved enough for retirement and feel comfortable with where you’re at in your plan, you may decide that the extra contributions aren’t necessary.
Financial advisors can help you navigate the different scenarios to determine what’s best for you. Here are some tips for how to choose a financial advisor.
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