SECURE 2.0 Section 109: Higher Catch-Up Contributions Coming for Ages 60–63 in 2025
Plan sponsors and retirement plan participants should prepare now for a key change in catch-up contributions that took effect January 1, 2025.
Section 109 of the SECURE 2.0 Act of 2022 introduces enhanced catch-up contribution limits for individuals aged 60, 61, 62, or 63 at any point during the taxable year. This change applies to 401(k), 403(b), and governmental 457(b) plans that already allow age 50+ catch-up contributions.
What’s Changing?
Currently, individuals age 50 and older may contribute an additional $7,500 in catch-up contributions (as of 2025 projections). Beginning in 2025, those who are 60–63 years old may contribute the greater of:
- $10,000, or
- 150% of the regular age 50+ catch-up limit (e.g., $11,250 if the limit remains $7,500)
These amounts will be indexed for inflation after 2025.
Illustrative Example:
| Participant Age | Total Contribution Limit | Standard Limit | Catch-Up Limit |
| Age 50–59 | $30,500 | $23,000 | $7,500 |
| Age 60–63 | $34,250 | $23,000 | $11,250 (150% of $7,500) |
| Age 64+ | $30,500 | $23,000 | $7,500 |
(Example for illustrative purposes only. Official IRS limits may vary.)
Who Is Impacted?
- Participants aged 60–63
- Plan sponsors
- Payroll providers
- Third Party Administrators (TPAs)
What Plan Sponsors Should Do:
- Assess systems – Review current processes for tracking participant age and contribution eligibility.
- Update payroll systems – Ensure systems are able to apply the increased catch-up limits and adjust when participants turn 64 and revert to the standard age 50+ catch-up limit.
- Communicate changes – Begin educating impacted participants about the new limits and their eligibility.
- Coordinate with TPAs and recordkeepers – Ensure all service providers are aligned and ready for implementation.
This provision offers a valuable savings opportunity for older workers approaching retirement—but it also requires proactive planning. Now is the time for sponsors to ensure systems are ready and communications are provided to those affected.
File #4600778