Anyone 50 or older and still working can put away extra money each year into their 401k, 403b or
SIMPLE IRAs as “catch-up contributions” into their retirement account. For 2024 the catch-up
contribution amount is $7,500 for 401k’s and 403b’s. Starting in 2025, taxpayers who are the age of 60,
61, 62 or 63 will be allowed a catch-up contribution capped at the greater of $10,000 or 150% of the
regular catch-up amount. Assuming the 2025 catch-up contribution remains at $7,500, then individuals
between the age of 60 and 63 should plan to increase their catch-up contributions to $11,250.
Remember, contributing to a retirement plan during your working years is one of the best tax shelters
available. You save taxes on the non-Roth money contributed, and then those contributions grow tax
deferred. Another benefit? Money sitting in your retirement accounts is generally fully creditor
protected. As you begin updating your 2025 benefits package offered through your employer’s HR
sometime later this fall, take note of this new rule if you will be aged 60-63 in 2025.
