New Age 60-63 Retirement Contribution Catch-Up Rule (SECURE 2.0 Act)
New Age 60-63 Retirement Contribution Catch-Up Rule (SECURE 2.0 Act)
Written by: Laurie Allen, CFP for LA Wealth Management
We’re always looking for ways to help our clients save more money for retirement and the government just gave us one heck of a leg up! The SECURE 2.0 Act, signed into law in December 2022, introduced a significant change for individuals aged 60 to 63 regarding catch-up contributions to retirement plans and it’s effective January 1, 2025!
The catch-up limit for those age 50+ is $7,500 and the higher catch-up contribution limit for those age 60-63 is $11,250. To qualify for the higher catch-up contributions, participants must meet specific criteria: Be 60, 61, 62, or 63 on Dec. of the calendar year.
To be 60 years old by December 2025, a person must have been born on or before December 31, 1965. This will apply to anyone born between Dec 1, 1961 and December 31, 1965
Example:
Base contribution: $23,500
Special Age 60-63 Catch-Up $11,250
Total allowable Contribution: $34,750
Key Highlights of the New Catch-Up Contribution Rule
Increased Catch-Up Limits for Ages 60-63
Starting in 2025, individuals aged 60, 61, 62, and 63 can contribute more to their 401(k), 403(b), and 457(b) plans.
For SIMPLE IRAs, the new limit will be the greater of $5,000 or 150% of the standard SIMPLE IRA catch-up contribution.
Indexed for Inflation
The new $10,000 and $5,000 limits will be adjusted annually for inflation.
Applies Only to Ages 60-63
Once an individual reaches age 64, the catch-up contribution reverts to the regular 50+ catch-up limit.
Action Steps: Turning 60 this year or already fall into the 60-63 category? Adjust your retirement contributions online now to reflect the higher limits! Unsure of what that amount is? Let us know and we’ll help you!
Securities and Advisory services offered through GWN SECURITIES, INC., Member FINRA/SIPC, a Registered Investment Advisor. 11440 N. Jog Road, Palm Beach Gardens, FL 33418. (561) 472-2700. LA Wealth Management and GWN Securities, Inc. are separate companies.
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