Key takeaways

• Savers are eligible to make catch-up contributions starting in the calendar year they turn 50, regardless of their actual birthday within that year
• In 2025, the catch-up contribution limit for most 401(k) plans, excluding SIMPLE 401(k)s, is $7,500 — that’s on top of the standard $23,500 limit
• From 2026, those who earn more than $145,000 in the prior calendar year will need to make all catch-up contributions into a Roth account with after-tax dollars

What turning 50 means for retirement account limits

People age 50 or older can save more than the typical limit with retirement plan catch-up contributions. Essentially, this allowance from the IRS gives retirement savers the opportunity to make up ground on reaching their financial goals in case they couldn’t save as much when they were younger.

Read on to learn what catch-up contributions are, why they matter, and how to take advantage of them. 

How do catch-up contributions work?

Catch-up contributions were introduced in 2001 as part of the Economic Growth And Tax Relief Reconciliation Act. They give people who are age 50 and older, or who turn 50 by the end of the calendar year, a chance to save more in their 401(k)s, IRAs and other retirement accounts.¹  

Catch-up contributions are considered elective deferrals, or deposits, an employee makes from their pay into their retirement account that surpass a legal limit, a plan-imposed limit or the actual deferral percentage (ADP) limit for highly compensated employees (HCEs).²

Catch-up contributions in 2025

The IRS reviews and adjusts contribution limits each year, primarily in consideration for inflation impacts. The catch-up contribution limits for 2025 are:³ 

Catch-up contributions for those ages 60 to 63

Beginning in 2025, savers who turn age 60, 61, 62 or 63 during the calendar year can make substantially higher catch-up contributions to their retirement plan. For this group, the so-called “super catch-up” contribution limit for 2025 for most 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan is $11,250.⁴

This means individuals ages 60-63 can potentially contribute up to $34,750 in 2025 (standard limit of $23,500 + enhanced catch-up of $11,250), if their plan allows. Once you reach age 64, you'll revert to the standard age 50+ catch-up limit.

How much total can I save this year?

Every year, by regulation, the IRS revises how much you can contribute to your retirement plan that year.

In 2025, for example, if you’re enrolled in a workplace program like a 401(k), a 403(b) or an eligible 457 plan, you can save up to $23,500 for retirement. The IRS annual limit for both traditional IRA and Roth IRA contributions is $7,500 in 2025. For those with a SIMPLE 401(k) plan, the maximum deferral amount in 2025 is $16,500.⁵

But catch-up contributions provide those age 50 and older with an opportunity to go above and beyond IRS standard thresholds. That means if you’re already 50 or will be 50 later this year, you can contribute a grand total of:⁶

• $31,000 in your 401(k), 403(b) or eligible 457 plan; $34,750 if age 60 to 63
• $31,000 in a government thrift savings plan; $34,750 if age 60 to 63
• $8,500 in a traditional or Roth IRA; $34,750 if age 60 to 63
• $20,00 in a SIMPLE 401(k) account
• $20,000 in a SIMPLE IRA

Even if your 50th birthday is December 31, you still qualify to begin making catch-up contributions at any point in 2025. 

Changes to catch-up contributions from 2026

A new rule going into effect in 2026 will change how high earners can make catch-up contributions.⁷ Starting in 2026, Americans age 50 and older will be divided into two groups based on annual income:

1. Those making less than $145,000 can continue making catch-up contributions to their regular pre-tax 401(k)s 
2. Those making $145,000 or more will have to make catch up contributions to a Roth plan, such as a Roth 401(k)

This means high-income savers will pay taxes on those contributions now but will get a tax break on the earnings later with a qualified withdrawal, provided they are at least 59½ and made their first contribution at least 5 years prior.*

The rule change was originally set to start in 2024 but has been postponed thanks to a new two-year administrative transition period. The delay gave Americans nearing retirement and earning over $145,000 two additional years to make catch-up contributions on a pre-tax basis. Note that the $145,000 wage limit is tied to inflation and subject to change.

How to make catch-up contributions

The first step to making catch-up contributions is checking that your budget can cover them. Savers wanting to boost their retirement balances may want to review their monthly expenses to determine if they have enough leftover funds each month to contribute more to their retirement accounts.

The next step is to set up those contributions. For employer-sponsored plans, human resources or the plan administrator can offer guidance on how to change your retirement contribution elections. In most cases, changes can be made at any time and even multiple times a year.

Changes to contributions to self-directed retirement accounts, such as an IRA, can typically be made via an online portal. There are three key factors to keep in mind, however:

1. Some plans set plan-imposed limits on elective deferrals that may be different than IRS-imposed limits. It’s important to understand the rules and details of your specific plan. Also, if you’re a highly compensated employee, you may have different limits as well.
2. There is an overall limit on the amount of combined employee and employer contributions that can be added to your retirement account each year. The maximum cap in a 401(k) in 2025 is 70,000.⁸
3. There is a deadline of December 31 to make any contributions, including catch-up contributions, to your employer-sponsored plan for that given year. On the other hand, you can continue adding to your IRA until the day taxes are due the following year. So, for 2025, you actually have until April 15, 2026, to make IRA contributions.

What are the benefits of making catch-up contributions?

Savers don’t always have the flexibility to save when first starting out in their career. Maybe they were preparing for a new baby, saving for a new house, or trying to pay off student loans. That’s where catch-up contributions can come into play.

Catch-up contributions can:

• Help boost the nest egg. Above all, catch-up contributions can help to grow your nest egg sitting aside for retirement. Compound earnings can help money grow faster as the more time that passes, the more time compounding has to work and potentially grow your savings.
• Reduce taxable income. Catch-up contributions made on a pre-tax basis are extra savings on top of regular pre-tax contributions. As a result, they could bump savers into a lower tax bracket, which means income would be taxed at a lower rate.
• Gain ground. Some professionals suggest savers need about 80% of their current earnings to cover their cost of living in retirement. Catch-up contributions can help savers make up for lost time and potentially achieve their desired retirement income.

The bottom line

Saving for retirement is a critical financial step for people of all ages. Starting early and building wealth for the future can be a great way to support peace of mind and a fully funded retirement, but that’s not always possible. Making catch-up contributions is just one of many ways to prepare for the future, especially as retirement nears.