The Setting Every Community Up for Retirement Enhancement (SECURE) Act 2.0, signed into law in December 2022, is a game-changer for retirement savers. One of the most significant changes is Section 109, which significantly increases the catch-up contribution limits for those between the ages of 60 and 63. This provision aims to help older workers accelerate their retirement savings in the crucial years leading up to retirement.
What is the SECURE Act 2.0?
The Setting Every Community Up for Retirement Enhancement (SECURE) Act 2.0, signed into law in December 2022, is a follow-up to the original SECURE Act of 2019. It introduces various provisions designed to enhance retirement savings opportunities for Americans.
Overview of SECURE Act 2.0 of 2022
The legislation aims to make it easier for individuals to save for retirement and to encourage employers to offer retirement plans. The act encompasses a wide range of changes to retirement savings rules, including:
- Secure Act 2.0 Catch Up Contributions: Raises the catch-up contribution limit for individuals aged 60-63, allowing them to contribute more to their retirement accounts in the calendar year leading up to retirement.
- Required Minimum Distribution (RMD) Age Increase: Pushes back the age at which RMDs must begin from 72 to 73 in 2023, and eventually to 75 by 2033.
- Automatic Enrollment in 401(k) Plans: Requires new 401(k) and 403(b) plans to automatically enroll eligible employees, with the option for employees to opt out.
- Student Loan Matching: Allows employers to make matching contributions to retirement plans based on an employee’s student loan payments.
- Part-Time Worker Eligibility: Expands eligibility for 401(k) plans to part-time workers who have completed at least 500 hours of service for two consecutive years.
- Emergency Savings Accounts: Permits employers to offer emergency savings accounts linked to retirement plans, providing employees with a way to save for unexpected expenses.
Check out our article on SECURE 2.0.
Understanding Catch-Up Contributions
Catch-up contributions allow participants aged 50 or older to contribute more to their retirement plans than younger savers. This is designed to help them compensate for years when they may not have been able to save as much. In 2024, anyone aged 50 or over can contribute an additional $7,500 beyond the standard elective deferral limit of $23,000, bringing the total to $30,500.
The SECURE Act 2.0 Boost: How Does the Age 60-63 Catch-Up Contribution Work?
Starting January 1, 2025, the SECURE Act 2.0, Section 109, dramatically increases the dollar limit for catch up contributions for those aged 60 to 63. In 2025, this group could contribute an additional $11,250 (higher catch-up limit, up to 150% of the regular catch-up limit) on top of the 2025 standard $23,500, totaling $34,750.
And that’s not all. The increased catch-up limits will be indexed for inflation after 2025, meaning they’ll keep pace with the rising cost of living, ensuring that the value of these contributions isn’t eroded over time.
Secure Act 2.0 Catch-Up Contributions
| Age | Contribution Amount | Catch Up Contributions | Total Contribution (2025) |
| Before 50 | Normal Contribution ($23,500 in 2025) | Not Eligible | $23,500 |
| After 50 | Normal Contribution | Normal Catch up ($7,500 in 2025) | $31,000 |
| Age 60 – 63 | Normal Contribution | 150% of Catch up (Up to $11,250 in 2025) | $34,750 |
| 64 and older | Normal Contribution | Normal Catch up (7,500 in 2025) | $31,000 |
Roth Catch Up Contributions Under SECURE Act 2.0
Secure Act 2.0 Roth catch up contributions are the other major change. Starting in 2026, if your income is above $145,000, your catch-up contributions need to be in the Roth TSP or Roth 401k. The ability to reduce your current year’s income would be gone, but the process will still grow tax-deferred and potentially be tax-free at distribution. The tax treatment may be different, but Secure Act 2.0 Roth Catch up amounts are the same as the above chart.
Who Benefits Most?
This change is particularly advantageous for those who may have started saving for retirement later in life, or for those who wish to take advantage of the tax benefits of contributing more to their retirement accounts in their peak earning years. It’s also a boon for those who simply want to boost their retirement savings as much as possible in the years leading up to retirement.
- Part-time workers: The act expands eligibility for 401(k) plan participation to part-time workers who have completed at least 500 hours of service for two consecutive years, providing them with more opportunities to save for retirement.
- Employees with student loans: Employers may now offer matching contributions to retirement plans based on employees’ student loan payments, helping them balance debt repayment with retirement savings.
What This Means for Employers
Employers will need to be prepared to implement these new catch-up contribution limits. They should update their payroll systems and inform their employees about the increased limits.
It’s also a good opportunity for employers to review their retirement plan offerings and ensure they are meeting the needs of their employees, particularly those in the 60-63 age bracket.
The Bigger Picture
The SECURE Act 2.0 represents a significant step forward in helping Americans save for retirement. By increasing catch-up contribution limits for those in their 60s, it provides a valuable tool for older workers to secure their financial future. As this new provision takes effect in 2025, it’s expected to have a positive impact on retirement savings rates and overall retirement readiness among this age group.
The enhanced catch-up contributions under SECURE Act 2.0 offer a unique opportunity for those aged 60 to 63 to supercharge their retirement savings. By taking advantage of these higher limits, individuals can make significant strides towards a more comfortable and secure retirement.
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