There's a New SECURE Act 2.0 Super Catch-Up Contribution Available to Some Retirees. Here's How It Could Help You Prepare for Retirement.

Source The Motley Fool

If you're between the ages of 60 and 63 by the end of the year, you're part of a rarefied (but lucky) group. Beginning this year, Section 603 of the SECURE Act 2.0 allows you to supercharge your retirement accounts by contributing even more -- but only if you're between 60 and 63. Once you hit age 64, the party is over, and you're back to making "regular" catch-up contributions.

Here's how the optional catch-up opportunity works.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

A person studying a chess board set out in front of them.

Image source: Getty Images.

Super catch-up

A super catch-up does not replace an ordinary catch-up. The opportunity to make super catch-ups may be new, but regular catch-up amounts have been around since 2001. As part of the Economic Growth and Tax Relief Reconciliation Act, Congress allowed people aged 50 and older to contribute more to their accounts, helping them reach their retirement savings goals.

These catch-up contributions were initially designed to circumvent established legal limits and limits imposed by individual retirement plans. For workers 50 and older, catch-up contributions have been helpful. After all, contributing an extra $7,500 (the maximum catch-up contribution to a 401(k), 403(b), and 457(b) plan can turbo-boost a retirement account.

Let's say someone doesn't start investing in a retirement plan until age 50. At that point, they peg out their 401(k) plan by contributing the full $23,500. With an average annual return of 7%, they have $590,432 in the account by the time they're 65. However, if they took advantage of the super catch-up between ages 60 and 63, they would have $693,381 by the end of their 65th year, over $100,000 more.

While the new super catch-up only applies to those aged 60, 61, 62, or 63, it is impressive. The following table offers a peek into how much more a person can invest for retirement during those crucial years.

Plan type

Contributor's Age in 2025

2025 Contribution Limit

2025 Catch-Up Contribution

Total Annual Contribution Limit

401(k), 403(b), governmental 457(b)

<49

$23,500

N/A

N/A

401(k), 403(b), governmental 457(b)

50-59, or 64 or older

$23,500

$7,500

$31,000

401(k), 403(b), governmental 457(b)

60-63

$23,500

$11,250

$34,750

SIMPLE IRA

<49

$16,500

N/A

N/A

SIMPLE IRA

50-59, or 64 or older

$16,500

$3,500

$20,000

SIMPLE IRA

60-63

$16,500

$5,250

$21,750

Data source: IRS.

A detail worth noting

Although the table shows both workplace retirement plans and SIMPLE IRAs, certain employees may not be able to make catch-up opportunities even if they're 50 or older. Typically, it's up to the employer and/or plan regulations to determine whether catch-up contributions are permitted. If a retirement plan doesn't allow for standard catch-ups, the new super catch-up will also not be available. Your best bet is to check with your plan administrator to ensure the plan you're enrolled in does allow for catch-ups.

Given the state of the U.S. economy, it's natural to wonder how your retirement savings will stack up. The best anyone can do at this point is to stay the course and, if possible, add every dollar to the accounts designed to support you in old age.

The $22,924 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income.

One easy trick could pay you as much as $22,924 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies.

View the "Social Security secrets" »

The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
What Crypto Whales are Buying For May 2025Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
Author  Beincrypto
Apr 21, Mon
Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
placeholder
Ethereum Price Ready to Surge—$2,000 Level Could Be Within ReachEthereum price started a fresh increase above the $1,800 zone. ETH is now rising and attempting a move above the $1,850 resistance. Ethereum started a fresh recovery wave above the $1,820 resistance.
Author  NewsBTC
May 08, Thu
Ethereum price started a fresh increase above the $1,800 zone. ETH is now rising and attempting a move above the $1,850 resistance. Ethereum started a fresh recovery wave above the $1,820 resistance.
placeholder
Ethereum Price Explodes Past $2,200 with 25% Surge—Momentum Builds FastEthereum price started a fresh surge above the $2,000 zone. ETH is now up over 25% and consolidating gains near the $2,200 zone. Ethereum started a fresh surge above the $2,000 resistance.
Author  NewsBTC
May 09, Fri
Ethereum price started a fresh surge above the $2,000 zone. ETH is now up over 25% and consolidating gains near the $2,200 zone. Ethereum started a fresh surge above the $2,000 resistance.
placeholder
Avalanche Price Forecast: AVAX eyes $30 as FIFA, VanEck back blockchain ecosystemAvalanche (AVAX) is gaining bullish momentum, extending gains on Friday, trading at $25.74 as investor confidence grows on the back of two major developments.
Author  FXStreet
May 23, Fri
Avalanche (AVAX) is gaining bullish momentum, extending gains on Friday, trading at $25.74 as investor confidence grows on the back of two major developments.
placeholder
Gold edges higher after Trump’s bill boosts bond market uncertaintyGold (XAU/USD) price extends its weekly gains, trading near $3,330 at the time of writing on Friday, up nearly 1% on the day, on a new tailwind for the safe haven precious metal.
Author  FXStreet
May 23, Fri
Gold (XAU/USD) price extends its weekly gains, trading near $3,330 at the time of writing on Friday, up nearly 1% on the day, on a new tailwind for the safe haven precious metal.
goTop
quote