How the 2025 IRS Super Catch Up Rule can help you Super Save

The start of a new year is always a great time to set fresh goals. Whether it's committing to a new fitness routine, picking up a hobby, or simply spending more quality time with family, the new year brings the perfect opportunity for a fresh start. The good news is, recent changes (the 2025 IRS Super Catch Up Rule) are about to make it easier for some workers to save more for retirement—and the timing couldn’t be better.

Major 2025 Changes: The Super Catch-up Rule

In 2025, the IRS is rolling out a game-changing update: the Super Catch-Up rule. This new provision is designed to help older workers save more in their 401(k)s, with special benefits for those in their early 60s.

Here's the scoop: Workers aged 60 to 63 can now contribute up to $11,250 more into their 401(k) plans—taking their total annual contribution to $34,750. That’s a 14% increase from the previous limits, and one of the biggest shifts in 401(k) contribution rules in decades.

But what does this mean for you? If you're in this age group and have the financial flexibility to do so, this is a golden opportunity to supercharge your retirement savings. 

Why This Matters for You

Catch-up contributions are designed for those who may not have had the chance to save as much earlier in their careers. If you’re already contributing the maximum to your 401(k) but fall between the ages of 60 and 63, the new IRS rule could give you the chance to build up your savings even faster—helping to close the gap as you near retirement.

Even if you're not yet 60, you can still make the most of the regular contribution limits. In 2025, workers under 60 will be able to contribute up to $23,500. For those 50-59, or 64 and older, there's still an additional $7,500 catch-up opportunity, just as in previous years.

Looking Ahead: The Mandatory Roth Catch-Up Rule in 2026

The IRS Super Catch-Up Rule isn’t the only game in town. As you plan your retirement strategy, it's important to keep an eye on the changes coming in 2026. Starting that year, a new rule will require higher earners—those making over $145,000 in 2025—to contribute their catch-up contributions to their 401(k) plans on a Roth basis, rather than on a traditional pre-tax basis.

This means that while your regular contributions can still be made on a tax-deferred basis, any catch-up contributions will need to be made with after-tax dollars. For many, 2025 could be the last year they can make catch-up contributions on a pre-tax basis, making it a critical opportunity to take full advantage of tax deferral before this mandatory shift to Roth contributions begins. If you're in this income bracket, it’s worth considering whether it makes sense to accelerate your contributions this year to maximize tax-deferred savings before the transition takes effect.

How Can You Maximize These Changes?

Not everyone qualifies for the super catch-up contributions, but for those who do, the 2025 changes present a major opportunity. To take full advantage, make sure to check with your employer. Some companies may require employees to "turn on" this new super-save option within their workplace retirement accounts. If you can't find the supersaver election in your employer's plan, it may not be offered, as under Secure 2.0, employers are not required to provide this option to their employees.

If you're unsure how to navigate these changes, or you have questions about whether the IRS Super Catch-Up Rule applies to you, our team at Financial Alternatives is here to help. Let’s talk about how you can make the most of these new IRS regulations and set yourself up for a stronger financial future.

Don't leave money on the table—take action today!

Marcelle joined Financial Alternatives in 2024 as a Financial Planning Analyst. She assists senior advisors with the financial planning process for clients. A recent graduate with a BS in Finance from San Diego State University, Marcelle will soon begin her education requirements to sit for the CERTIFIED FINANCIAL PLANNER® exam.

Sources

IRS. 2024, November 1st. 401(k) limit increases to $23,500 for 2025, IRA limit remains $7,000. https://www.irs.gov/newsroom/401k-limit-increases-to-23500-for-2025-ira-limit-remains-7000