The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) created the catch-up provision, allowing eligible participants to set aside more in contributions to their retirement plans. Employees age 50 and older are Catch-up eligible increasing their maximum deferral limit of $23,500 for 2025 by: $7,500 for participants in a 401(k), 403(b), 457 or thrift savings plan; $3,500 for those in a SIMPLE IRA; or $1,000 for those participating through an IRA. During hearings leading up to the passing of SECURE 2.0, Congress correctly identified that few Americans have properly saved for retirement so they decided to allow a select group of employees nearing retirement the opportunity to help get themselves in a better position to retire – be their own super-heroes.

Under Section 109 of SECURE 2.0, employers can elect to permit super catch-up contribution opportunities to plan participants. Starting in 2025, participants who attain age 60-63 by the end of the year will be eligible to make an increased catch-up contribution equal to 150% of the standard catch-up limit of $7,500. So instead of a $7,500 catch-up, they will be allowed to defer $11,250 for 2025 (this will be indexed to inflation going forward).

Example 1: Stacey turns 60 on December 31, 2025 – even though he was 59 most of the year, he can make the full super catch-up of $11,250.

Conversely,

Example 2: Alex turns 64 on December 31, 2025 – even though she was 63 most of the year, she can only make a catch-up of $7,500 for the year.

Bottom line – If you were born between January 1, 1962 and December 31, 1965 AND your plan allows for higher catch-up contributions you may make catch-up contributions of $11,250 for the 2025 Calendar Plan Year. If your Plan is an off-calendar Plan year, dates will need to be adjusted accordingly. If you are unsure, please contact your ABG Client Relationship Manager or Sales Representative.