Planning for retirement can feel overwhelming — and the statistics show many Americans share that feeling. According to a recent report by the Federal Reserve, only 31% of non-retired adults think their retirement savings are on track. Even more concerning, a quarter of Americans have no retirement savings.
As retirement gets closer, many people realize they haven't saved as much as they had hoped. Between everyday expenses, unexpected life events, and the natural ups and downs of the market, it's easy to fall behind. But the risk of entering retirement without enough assets is real: it can mean delaying retirement, lowering your lifestyle expectations, or even facing financial insecurity in your later years.
The good news? If you are in your early 60s, there's a new opportunity to catch up — thanks to recent changes under SECURE Act 2.0.
New Rules for Catch-Up Contributions: What You Need to Know
Once you reach age 50, you are eligible to make extra "catch-up" contributions to your retirement accounts.
- For a 401(k) plan, the standard catch-up amount is $7,500.
- For a SIMPLE IRA plan, it's $3,500.
However, starting in 2025, SECURE Act 2.0 introduces even larger catch-up contribution limits for participants who are ages 60, 61, 62, or 63.
Here's what the new limits will be:
- 401(k) participants can contribute an additional $11,250 (instead of $7,500).
- SIMPLE IRA participants can contribute an additional $5,250 (instead of $3,500).
Important: These larger catch-up contributions are only available during the years when you are specifically age 60, 61, 62, or 63 — not before or after.
This gives individuals in these key years a unique window to boost their retirement savings during what are often their highest earning years.
Why This Matters to You
If you are in this age range, increasing your retirement contributions can significantly impact your future financial security. Every extra dollar saved (especially with compounding investment growth) can provide more flexibility and peace of mind in retirement.
Plus, depending on how you choose to direct your catch-up contributions, there are additional benefits:
- Traditional 401(k) or SIMPLE IRA contributions can help you reduce your taxable income now, potentially lowering your current-year tax bill.
- Roth contributions (if available in your plan) allow you to grow your money tax-free and withdraw it tax-free in retirement, giving you more flexibility when it comes time to use your savings.
Imagine retiring with an extra $30,000–$40,000 (or more) in your account just by maximizing these new catch-up opportunities!
Some Questions to Think About:
- Are you confident you're saving enough to support the retirement lifestyle you envision?
- Have you reviewed how these new catch-up rules could fit into your current retirement savings strategy?
- Are you taking advantage of your plan's Traditional and Roth contribution options?
- Who is helping you make sure you're using all the tools available to secure your retirement future?
Next Steps
The years leading up to retirement are critical for building and protecting your financial foundation. If you're in your early 60s — or getting close — now is the time to plan how to take advantage of the new, increased catch-up contribution limits.
Whether you want to lower your tax burden now or build tax-free income for later, understanding your options — and making strategic moves — can make all the difference.
Want to learn how to maximize your catch-up contributions?
Are you curious which approach — Traditional or Roth — makes the most sense?
Our advisors can help you explore your options and build a strategy that fits your goals.
Let's talk and make sure you're fully prepared for the retirement you deserve.