The SECURE 2.0 Act, which Congress recently passed, contains a provision that will allow larger “catch-up” contributions to certain retirement plans. Defined contribution retirement plans are permitted, but not required, to allow participants age 50 or older to make additional catch-up contributions. For 2023, the 401(k) plan catch-up contribution amount is $7,500 and the SIMPLE plan amount is $3,500. Starting in 2025, the new law increases the catch-up limit for individuals who are ages 60 through 63 to the greater of $10,000 for 401(k)s and $5,000 for SIMPLE plans or 50% more than the regular catch-up amount. The increased amounts are indexed for inflation beginning in 2026.
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