Catch-Up Contributions for Retirement Savers 60-63: What to Know

The SECURE 2.0 Act, enacted in December 2022, introduced several significant changes to retirement savings plans. One of the key provisions is Section 109, which allows individuals aged 60, 61, 62, and 63 to make larger catch-up contributions starting in 2025. The provision is designed to help older workers boost their retirement savings as they approach retirement age.

Plan participants that continue to work past age 63 will still be eligible to make catch-up contributions, but under the lower amount available to individuals aged 50-59.

Key Points:

Eligibility: Individuals aged 60, 61, 62, or 63.
Contribution Limits: The enhanced catch-up contribution limit is $5,000 or 150% of the standard age 50+ catch-up contribution limit, whichever is greater.
Effective Date: The rule applies to taxable years beginning after December 31, 2024^[1]^[2].

Example

Consider an employee, John, who is 61 years old in 2025. Under the new rules, John can make an enhanced catch-up contribution to his 401(k) plan. If the standard age 50+ catch-up contribution limit for 2025 is $7,500, John can contribute the greater of $5,000 or 150% of $7,500, which is $11,250. Therefore, John can make an additional catch-up contribution of $11,250 in 2025.

Chart: Enhanced Catch-Up Contribution Limits

Plan Type	Age	Standard Catch-Up Limit (2025)	Enhanced Catch-Up Limit
401(k), 403(b)	50+	$7,500	N/A
401(k), 403(b)	60-63	$7,500	$11,250
SIMPLE IRA	50+	$3,500	N/A
SIMPLE IRA	60-63	$3,500	$5,280

Impact on Retirement Plans

401(k) Plans:

Catch-Up Contributions: Employees aged 60 to 63 can make larger catch-up contributions beyond the standard limit. This provision helps older workers maximize their retirement savings in the final years before retirement^[1]^[2].

403(b) Plans:

Similar Rules: The same rules apply to 403(b) plans, which are typically offered by public schools and certain tax-exempt organizations. Eligible participants can make enhanced catch-up contributions^[1]^[2].

SIMPLE IRAs:

Catch-Up Contributions: SIMPLE IRAs also allow catch-up contributions for employees aged 60 to 63. The deferral limit is the same as for 401(k)s and 403(b) at $5,000 or 150% of the standard age 50+ catch-up contribution limit, whichever is greater. For SIMPLE IRAs the normal 50+ catch-up contribution limit is $3,500 making the enhanced amount $5,280 ($3,500 x 150%)

Government Resources

To make the increased catch-up contribution, the individual must be of qualifying age (60-63) by the end of the year. This means a person that is 59 during the year but will turn 60 by the last day of the year can participate in making catch-up contributions with higher limits. The lower, standard 50+ catch-up amount will apply in the year the person turns 64.

Conclusion

The new rules under Section 109 of the SECURE 2.0 Act represent a significant change for individuals aged 60 to 63 making catch-up contributions to their retirement plans. By allowing larger contributions, the government aims to help older workers enhance their retirement savings. Employers and plan administrators must understand and comply with these new requirements to avoid potential penalties.

The changes to contributions limits offers an opportunity to defer more and enhance retirement savings, but can also create complexity and questions. Speak with your advisor to review your retirement plan and better understand the new rules.

^[1]SECURE Act 2.0, Section 109: Higher Catch-Up Limit to Apply at Age 60 …
^[2] New for 2025: ‘Super’ 401 (k) Catch-Up Limits for Ages 60-63 – Kiplinger
^[3]SECURE 2.0 developments and guidance for 2024 – The Tax Adviser

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Catch-Up Contributions for Retirement Savers 60-63: What to Know

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