The Setting Every Community Up for Retirement Enhancement (SECURE) Act 2.0, signed into law in December 2022, is a game-changer for retirement savers. One of the most significant changes is Section 109, which significantly increases the catch-up contribution limits for those between the ages of 60 and 63. This provision aims to help older workers accelerate their retirement savings in the crucial years leading up to retirement.
The Setting Every Community Up for Retirement Enhancement (SECURE) Act 2.0, signed into law in December 2022, is a follow-up to the original SECURE Act of 2019. It introduces various provisions designed to enhance retirement savings opportunities for Americans.
It aims to make it easier for individuals to save for retirement and to encourage employers to offer retirement plans. The act encompasses a wide range of changes to retirement savings rules, including:
Key Provisions:
Check out our article on SECURE 2.0
Catch-up contributions allow participants aged 50 or older to contribute more to their retirement plans than younger savers. This is designed to help them compensate for years when they may not have been able to save as much. Currently, anyone aged 50 or over can contribute an additional $7,500 beyond the standard elective deferral limit of $22,500 in 2024, bringing the total to $30,000.
Starting January 1, 2025, catch up contributions SECURE Act 2.0, Section 109, dramatically increases the dollar limit for those aged 60 to 63. In 2025, this group could contribute an additional $11,250 (higher catch-up limit, up to 150% of the regular catch-up limit) on top of the current standard $22,500, totaling $33,750.
And that’s not all. The increased catch-up limits will be indexed for inflation after 2025, meaning they’ll keep pace with the rising cost of living, ensuring that the value of these contributions isn’t eroded over time.
| Secure 2.0 Catch Up Contributions | |||
|---|---|---|---|
| Age | Contribution Amount | Catch Up Contributions | Total Contribution (2024) |
| Before 50 | Normal Contribution ($22,500 in 2024) |
Not Eligible | $22,500 |
| After 50 | Normal Contribution | Normal Catch up ($7,500 in 2024) |
$30,000 |
| Age 60 - 63 | Normal Contribution | 150% of Catch up (Up to $11,250 in 2025) |
$33,750 |
| 64 and older | Normal Contribution | Normal Catch up (7,500 in 2024) |
$30,000 |
* IRS Limits for 2025 have not been announced at the time of the article. Additional Catch-up Contributions may be different.
Secure Act 2.0 Roth catch up contributions are the other major change. Starting in 2026, if your income is above $145,000, your catch up contributions need to be in the Roth TSP or Roth 401k. The ability to reduce your current year’s income would be gone, but the process will still grow tax-deferred and potentially be tax-free at distribution. The tax treatment may be different, but Secure 2.0 Roth Catch up amounts are the same as the above chart.
This change is particularly advantageous for those who may have started saving for retirement later in life, or for those who wish to take advantage of the tax benefits of contributing more to their retirement accounts in their peak earning years. It’s also a boon for those who simply want to boost their retirement savings as much as possible in the years leading up to retirement.
Employers will need to be prepared to implement these new catch-up contribution limits. They should update their payroll systems and inform their employees about the increased limits. It’s also a good opportunity for employers to review their retirement plan offerings and ensure they are meeting the needs of their employees, particularly those in the 60-63 age bracket.
The SECURE Act 2.0 represents a significant step forward in helping Americans save for retirement. By increasing catch-up contribution limits for those in their 60s, it provides a valuable tool for older workers to secure their financial future. As this new provision takes effect in 2025, it’s expected to have a positive impact on retirement savings rates and overall retirement readiness among this age group.
The enhanced catch-up contributions under SECURE Act 2.0 offer a unique opportunity for those aged 60 to 63 to supercharge their retirement savings. By taking advantage of these higher limits, individuals can make significant strides towards a more comfortable and secure retirement.
If you have additional federal benefit questions, contact our team of CERTIFIED FINANCIAL PLANNER™ (CFP®) and Chartered Federal Employee Benefits Consultants (ChFEBC℠). At PlanWell, we are federal employee financial advisors with a focus on retirement planning. Learn more about our process designed for the career fed.
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