Workers nearing retirement have a new opportunity to boost their savings in 2025, thanks to increased 401(k) contribution limits targeting those aged 60 to 63.
The IRS has raised the maximum employee contribution to a 401(k) to $23,500 for 2025, up from $23,000 in 2024. But those entering their early 60s can go even further — contributing up to $34,750 annually when combining standard and new “super” catch-up provisions.
Who qualifies for the new catch-up limit?
The enhanced contribution limit applies specifically to workers who turn 60, 61, 62, or 63 in the 2025 calendar year. That includes older members of Generation X and the youngest Baby Boomers.
- Base employee contribution: $23,500
- Standard catch-up (age 50+): $7,500
- Extra catch-up for ages 60–63: $3,750
- Total possible: $34,750
For example, a 59-year-old turning 60 in September 2025 can take full advantage of the new $34,750 cap.
Why it matters
The provision is part of SECURE 2.0, a bipartisan retirement reform law signed in late 2022. It aims to help workers save more during what is often a high-earning phase of life, especially as children become financially independent.
Personal finance expert Christine Benz suggests these years can be ideal for ramping up retirement savings — especially for those free from earlier expenses like daycare, tuition, or sports programs.
How to maximize your savings
To reach the new cap, workers need to plan ahead. For example:
- A 61-year-old paid biweekly would need to contribute $1,336.54 per paycheck over 26 pay periods to hit $34,750.
- If only $15,000 has been saved by midyear, contributions would need to rise to $1,646 per paycheck over the next 12 periods to catch up.
Consumers can use online calculators — such as Clark Howard’s 401(k) max-out tool — to estimate exact contributions needed.
Roth rule changes for high earners
Starting in 2026, workers earning more than $145,000 annually must make catch-up contributions in Roth (after-tax) dollars. This change will require most plans to offer a Roth option, which Fidelity reports already exists in over 94% of its plans.
Those earning less than $145,000, adjusted for inflation, can continue using pre-tax contributions for catch-ups.
Key takeaways
- 401(k) limits rise to $34,750 for certain ages in 2025.
- Applies only to workers turning 60 to 63 that year.
- High earners will face new Roth requirements starting in 2026.
- Use online calculators to stay on track and increase paycheck deductions if needed.
- Consider lifestyle adjustments — fewer subscriptions, road trips — to free up savings room.
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