If you are turning 60 to 63 years of age in 2025 or later, you have a unique opportunity to supercharge your retirement savings with new, more substantial catch-up contributions.
Background
Historically, the tax laws cap the annual contribution limits to 401(k), 403(b) and other qualified retirement plans. They also provide additional means for individuals 50 and older to accelerate their savings contributions during their top-earning years as they get closer to retirement age. For 2025, the maximum pre-tax amount individuals may contribute to an employer’s plan is $23,500, plus $7,500 in catch-up contributions for those who have reached age 50. However, there are various reasons why individuals may fall behind in meeting their ultimate savings goals. Rather than risking financial instability, a new law gives savers the ability to fortify their next nest eggs in the years right before retirement.
New Catch-Up Contributions
Individuals ages 60 to 63 may boost their retirement savings with supercharged annual catch-up contributions of up to $11,250 to their employer-sponsored retirement accounts beginning in 2025. At age 64, the catch-up contribution will be limited to the same amount for individuals ages 50 and older.
| 2025 401(k) Contribution Limits | |
| Individual Account Owner | $23,500 |
| Account Owner Ages 50 and Older | $7,500 |
| Account Owner Ages 60, 61, 62, 63 | $11,250 |
| Account Owner Ages 64 and Older | $7,500 |
Supercharged catch-up contributions, like all salary-deferred contributions to 401(k) and 403(b) retirement savings plans, reduce an individual’s taxable income in the years they are made. Contributions grow tax-deferred until account owners take taxable withdrawals in retirement.
To maximize the opportunities presented by the new supercharged catch-up contributions, you must plan ahead, keeping an eye on your ultimate savings goals and your ability to budget and adjust your spending as you get closer to retirement.
About the Author: Olga Ismail is the head of Retirement Plan Consulting and a financial advisor with Provenance Wealth Advisors (PWA), an Independent Registered Investment Advisor affiliated with Berkowitz Pollack Brant Advisors + CPAs and a registered representative with PWA Securities, LLC (PWAS). She can be reached at the firm’s Fort Lauderdale, Fla., office at (954) 712-8888 or info@provwealth.com.
Provenance Wealth Advisors (PWA), 200 E. Las Olas Blvd., 19th Floor, Ft. Lauderdale, FL 33301 (954) 712-8888.
Olga Ismail is a registered representative of and offers securities through PWA Securities, LLC, Member FINRA/SIPC.
This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.
Any opinions are those of the advisors of PWA and not necessarily those of PWA Securities, LLC. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of PWAS, we are not qualified to render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional. Prior to making any investment decision, please consult with your financial advisor about your individual situation.
401(k) plans are long-term retirement savings vehicles. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59½, may be subject to a 10 percent federal tax penalty. Investing involves risk, investors may incur a profit or loss regardless of the strategy or strategies employed. Future investment performance cannot be guaranteed. Matching contributions from an employer may be subject to a vesting schedule. Please review your retirement plan documents or consult with a financial professional for more information.
To learn more about Provenance Wealth Advisors estate planning services click here or contact us at info@provwealth.com
Posted on May 7, 2025