In the massive SECURE Act 2.0 legislation that passed at end of 2022 is a new rule, that begins in a few months in 2025, that is designed to help those getting close to retirement to save more. If you're age 60-63, or know people in that age range, pay attention!
The rules already in place say that those over 50 can contribute the base amount PLUS a Catch-up amount. These amounts are increased regularly tied to inflation. At this point in the year, some people begin guessing what the new amounts will be. Right now the estimate for 2025 is $23,500 base limit for all plus $7,500 Catch-up for those over 50. If these estimate are accurate, the total limit for those over age 50 will be close $31,000 in 2025.
The NEW RULE helps out people that are age 60-63 - a very specific limited age range.
The idea: people at this age are getting close to retirement and their Catch-up is increased to $10,000 or 150% of the normal Catch-up amount, whatever is greater. That could be $11,250 in 2025. So in 2025, if you are age 60-63, your total contribution limit is estimated to be $23,500 + 11,250 = $34,750.
These numbers are estimates, the actual 2025 limits will be announced by the IRS around Nov. 1, but will be very close to these numbers, if not exact.
Please share this widely as many may not be aware.