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Maximize Your Retirement Savings with Enhanced Catch-Up Contributions

If you’re nearing retirement, every dollar you save could help you work towards your financial goals.

Starting in 2025, a new provision under SECURE 2.0 will allow individuals aged 60 to 63 to contribute even more to their retirement plans through enhanced catch-up contributions. Here’s what you need to know to take advantage of this opportunity.

What Are Catch-Up Contributions?

Catch-up contributions are additional amounts you can allocate to your retirement plan once you reach a certain age. For those aged 50 and above, the traditional catch-up contribution limit is $7,500. But now, individuals turning 60 to 63 will be eligible to contribute an additional $3,750 annually—bringing the total to $11,250 per year.

Who Qualifies?

To take advantage of the enhanced catch-up contributions, you must:

  • Be between the ages of 60 and 63 during the calendar year.
  • Be enrolled in a 401(k), 403(b), or 457(b) plan.

Your eligibility is determined by your age at the end of the year. For example:

  • If you turn 60 by December 31, 2025, you can contribute up to $11,250 that year.
  • If you turn 64 by December 31, 2025, the standard $7,500 catch-up contribution applies.

Why It Matters

Retirement savings offer tax advantages, and this new rule gives you an opportunity to help grow your nest egg during the critical pre-retirement years. By taking advantage of the enhanced catch-up contribution limit, you could potentially save an additional $11,250 annually for up to three years—adding up to $33,750 in extra savings.

Plan Ahead

To make the most of this provision, ensure you:

  1. Review your current retirement plan contributions.
  2. Adjust the amount you save starting in 2025 to leverage the enhanced limits.
  3. Consult with a financial advisor to create a personalized retirement income strategy.

At OneDigital, our advisors are here to provide guidance on these changes and help you maximize your retirement savings. Whether you’re just starting to plan or fine-tuning your strategy, we can help you every step of the way.

Take Action Today

The sooner you start planning for these changes, the better prepared you’ll be. Schedule a one-on-one session with a OneDigital financial advisor to discuss how these enhanced catch-up contributions can work for you. Together, we’ll help you build a more secure financial future.

=> Schedule Your Session Now

 

 

Note: Contribution limits are subject to change based on IRS regulations. This material is for informational purposes only and does not constitute tax advice. Investment advice is offered through OneDigital Investment Advisors LLC.

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