New retirement boost for individuals ages 60–63

Starting in 2025, a new rule under the SECURE 2.0 Act of 2022 (SECURE 2.0) gives workers aged 60-63 a chance to increase their savings for retirement. If your employer offers this feature in your retirement plan, you could make extra catch-up contributions beyond the usual deferral limits to help give your savings a boost. 

What is this catch-up contribution?

SECURE 2.0 included a provision to help employees nearing retirement contribute more into their 401(k), 403(b), and governmental 457(b) plans during the crucial pre-retirement years, if your employer’s plan offers this feature. If the plan does, you may want to take advantage of this option, especially if you have an employer match to help give your retirement savings an additional boost.

Are you eligible? 

You’re eligible if you:

• You turn 60, 61, 62 or 63 by December 31 of the calendar year; and
• You’ve already maxed out deferrals to the plan under the IRS annual deferral limit (including any available 15 years of catch-up permitted under your employer’s 403(b) plan; but
  • If you turn 64 by December 31 of the calendar year, you’ll go back to the standard age 50+ catch-up limit

How much can you contribute?

If your employer has this feature and you are eligible, you’ll be able to contribute the greater of

• $10,000, or
• 150% of the standard age 50+ catch-up limit.
  • Be sure to stay informed with the most up-to-date IRS contribution limits.

Plan-specific rules: 

Here’s how it works, depending on the plan in which you participate:

If you participate in a 401(k) or 403(b) plan:

• Your plan must allow for the increased catch-up.
• Pre-tax deferrals, Roth contributions and age-based catch-up contributions are coordinated across 401(k), 403(b), SARSEP and SIMPLE plans in which you participate in the calendar year.
• After the calendar year in which you have reached age 63, the standard age 50+ catch-up limit will apply, meaning that if you are age 64 or older by the end of the calendar year, you can only contribute up to the age 50+ catch-up contribution limit.

For Governmental 457(b) plans:

• Your plan must allow for the increased catch-up.
• You must first meet the general IRS 457 annual contribution limit.
• You can’t use both the Age 60–63 Catch-up and the Special 457 Catch-Up in the same tax year — but you can use whichever catch-up gives you the bigger benefit.
• After the calendar year in which you have reached age 63, the standard age 50+ catch-up limit will apply, meaning that if you are age 64 or older by the end of a calendar year and are not contributing under the Special 457 Catch-Up, you can only contribute up to the age 50+ catch-up contribution limit.

Roth requirement for high earners

• If your wages from your employer sponsoring the plan are subject to FICA taxes and you earned more than $145,000 (subject to annual IRS cost of living adjustments) in FICA wages last year, these catch-up contributions must be made as Roth (after-tax) contributions starting in 2026.

What’s next?

This new catch-up contribution is a great chance for you to invest in yourself, especially as you get closer to retirement. Ask your employer or HR contact if they are considering or are already offering this new feature.

Stay informed with updates from your employer or plan provider and save more if you can. To be sure you are eligible, you may also want to: 

• Review your annual contributions to make sure you’re hitting your plan’s deferral limits first
• Talk to a financial professional to see how this extra savings opportunity fits with your holistic retirement plan
• Update your salary reduction agreements, as warranted

Final thoughts

Remember, if you are between the ages of 60-63 by year-end, doing what you can now to catch up can help move you closer to the retirement you envision. Be sure to supercharge your savings if you can and acknowledge your progress along the way to help you retire well.