Occasionally the Federal Government makes changes that are beneficial. This year if you are between the ages of 60-63, there is a substantial change for you to take advantage of. It is the Super Catch-up Provision in the Secure Act 2.0. Here is what it provides:
For 2025, the standard catch-up contribution limit for 401(k) plans is $7,500. That means anyone who meets the age requirements can contribute a total of $31,000 to their workplace retirement plan.
The SECURE 2.0 Act increased the catch-up contribution for some employees to $10,000 or 150% of the standard catch-up contribution, whichever is greater. Since 150% of $7,500 is $11,250, that is the new catch-up contribution limit in 2025 for select investors.
Here is the catch. You are only eligible to make this super catch-up contribution in 2025 if you are between the ages of 60 and 63 (inclusive) at the end of the year. If you are turning 64 in 2025, sorry, you just missed the boat. But if you are about to celebrate your 60th birthday, you will have four years to make supersized contributions to your 401(k). *
If you are eligible for this increased savings, please take advantage of this opportunity to put money in your pocket vs. paying Federal Income Tax.
*USAToday.
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