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401(k) Catch-Up Limits

By Nayelis Delgado

What Is a Catch-Up Contribution?

A catch-up contribution is a type of retirement savings contribution that allows people aged 50 years and older to make additional contributions to their 401(k) accounts and individual retirement accounts (IRAs), beyond the standard annual limits. These contributions permit older workers to set aside more earnings for their retirement through a variety of plans. This is especially useful for individuals who have not been saving for retirement or may have started late, allowing them to have tax benefits as they increase their retirement savings towards the end of their working career. 

Catch-Up Contribution Requirements 

The main eligibility requirement to enroll for catch-up contributions is the individual’s age, as stated previously these contributions are for participants 50 years or older at the end of the calendar year. However, some plans do require other specific requirements for eligibility. In order for an individual to be considered eligible for additional contributions and regular catch-up contributions for a 403(b) plan, the employee must have at least 15 years of service. 

Catch-Up Contribution Limits

The IRS reviews and adjusts contribution limits yearly based on the impacts of inflation during that period. For 2024 and 2025, the maximum contribution for a traditional and Roth IRA is $7,000 with a $1,000 catch-up limit for participants 50 years and older. The annual contribution limit for the 401(k) plans, 403(b) plans, governmental 457 plans, and Thrift Saving Plans has been raised to $23,500 in 2025 from $23,000 in 2024; the catch-up contribution limit for both 2024 and 2025 is $7,500 for employees 50 years of age and older.

Changes for 2025

Starting in 2025, participants of the 403(b), governmental 457 plans, the Thrift Savings Plan, and most individuals participating in the 401(k) can contribute up to $31,000 each year if making the maximum annual catch-up contribution. 

In addition, for 2025 under SECURE 2.0, individuals aged 60-63 will be eligible for enhanced catch-up contributions. This limit has been raised from $7,500 for those age 50+ to $11,250 for those 60-63. To qualify for enhanced catch-up contributions, participants must be 60-63 by the end of the calendar year and already contribute the maximum deferral amount. Once participants turn 64, they revert to the standard 50 years and older catch-up contribution limit.

This information has been prepared for informational purposes only, and is not intended to provide, and should not be relied upon for tax, legal, or accounting advice. If you have any questions regarding 401(k) catch-up limits, please do not hesitate to contact us at Lear & Pannepacker.