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‘Super catch-up’ 401(k) contributions for 2025 are still in play

by Kate Dore, CFP®, EA
September 10, 2025
in Markets
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In the event you’re an older employee who needs to spice up retirement financial savings, you may benefit from an enormous 401(okay) change, specialists say.

For 2025, you possibly can defer as much as $23,500 into your 401(okay), up from $23,000 in 2024, and employees age 50 and older could make an additional $7,500 in catch-up contributions. However beginning this 12 months, employees age 60 to 63 even have what some specialists are calling “tremendous catch-up” contributions.

Enacted by way of the Safe Act 2.0, the 2025 catch-up contribution for employees age 60 to 63 jumps to $11,250, which brings the entire worker deferral restrict to $34,750 for this group. (The outlined contribution restrict, which incorporates your organization match, revenue sharing and different employer deposits, is even larger.)

Extra from Monetary Advisor Playbook:

Here is a have a look at different tales affecting the monetary advisor enterprise.

Typically, ages 60 to 63 are a “fairly good candy spot,” amongst your higher-earning years, which may make it simpler to avoid wasting extra, in response to licensed monetary planner Abigail Rose, director of tax planning for Keeler & Nadler Household Wealth in Dublin, Ohio.

However most employees aren’t maxing out their 401(okay) or common catch-up contributions, in response to Vanguard’s 2025 How America Saves report, which is predicated on greater than 1,400 plans and practically 5 million contributors.

In 2024, practically all Vanguard plans supplied catch-up contributions, however solely 16% of eligible employees made these deferrals, the report discovered. These have been sometimes larger earners with larger account balances.

Most plans provide tremendous catch-up contributions

Money move allowing, tremendous 401(okay) catch-up contributions “can simply be completed, so long as you are conscious of it,” stated CFP Jim Guarino, managing director at Baker Newman Noyes in Woburn, Massachusetts. 

Solely 3% of retirement plans hadn’t added the characteristic for 2025 as of Could, in response to Constancy information. For these plans, catch-up contributions robotically cease as soon as deferrals attain $7,500, the corporate informed CNBC.

With roughly 4 months till year-end, there’s nonetheless time to extend 401(okay) contributions to max out deferral and catch-up contribution limits for 2025.    

The upper 401(okay) catch-up is “an incredible instrument within the toolbox,” particularly for larger earners on the lookout for a tax deduction, Dan Galli, a CFP and proprietor of Daniel J. Galli & Associates in Norwell, Massachusetts, beforehand informed CNBC.

Whereas pretax 401(okay) contributions provide an up-front tax break, you will pay common revenue taxes on withdrawals, relying in your future tax bracket.



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