Super-Charged 401k Catch-Up

A quick note from my desk. It applies to people who will be 60, 61, 62 or 63 next year.

You get to contribute more money to your 401k starting next year!!!

Please do not ask me to explain WHY this ONLY applies to people of this age, but that is how this new rule works. Also, you need to be this age by the end of the year.

The short version is starting next year if you fall into one of these ages you can put away additional money into your 401k. Basically, the regular Catch-Up increases to $11,250.

A deeper explanation:

• The maximum employee contribution to your 401k next year is capped at $23,500 for 2025.
• The regular Catch-Up for those at least 50 years old is an additional $7,500.
• However, for those in the 60-63 bracket you can do a super-charged Catch-Up that is 150% of the regular Catch-Up.
• The IRS has calculated this super-charged amount at $11,250.

If you are 50-59, the most you can put into your 401k next year is $31,000 (I am not including mega backdoor stuff).

If you will be between 60-63 next year, your maximum employee contribution is $34,750.

I know this does not apply to everyone, but I wanted to share it for a few reasons:

• Maybe it does apply to you and you want to get ready for additional 401k contributions.
• Perhaps you have a relative or friend you know it will apply to.
• And of course, maybe you happen to know someone who is eligible but their advisor has not said a word about it. Fortunately, you happen to know a forward-thinking advisor who shares this information and is accepting new clients😊