What is the ‘super’ 401(k) catch-up contribution for older workers?

Employees in their early 60s can contribute several thousand dollars more to their 401(k) retirement plan starting next year thanks to a recent change in tax law. People 50 and older were already able to put in more than the general 401(k) limit as a “catch-up” contribution but in 2025 workers ages 60 to 63 have a “super catch-up” option, a chance to save an additional $3,750 tax-deferred. Here’s how 401(k) contribution limits breakdown for 2025, according to the IRS:

• Employee contribution limit: $23,500
• Catch-up contributions for employees 50 and older: $7,500
• Catch-up contributions for employees 60–63: $11,250

That means workers in their early 60s can potentially contribute a total of $34,750 to a tax-advantaged workplace retirement account. The change — which applies to 401(k)s, as well as, 403(b)s, governmental 457(b) plans and the federal government’s Thrift Savings Plan — is a result of the Secure 2.0 tax law passed in 2022. It’s meant to give those who are approaching retirement age an opportunity to save more money. While the higher catch-up limit will come as good news for some, stashing nearly $35,000 for retirement is unrealistic for most Americans. Just 15% of retirement plan participants took advantage of catch-up contributions in 2023, according to Vanguard. Those who did so tended to have higher incomes (over $150,000) and “substantially higher account balances,” Vanguard found. Meanwhile, contribution limits on a different tax-advantage savings account, the Individual Retirement Account (IRA), will remain at $7,000 in 2025. For people 50 and over, the IRA catch-up contribution limit remains $1,000. The benefit of an IRA is that savers typically have more investment options and control over their portfolio. The downside is that they don’t include employer matches, while 401(k)s typically do.