Catch-Up Contributions: Supercharge Your Savings After 50

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No matter how serious you are about saving, you canย maximize your savingsย by taking advantage of catch-up contributions.

Youโ€™re not alone if youโ€™re 50 or older and feeling behind on your retirement savings. Often, people reach their peak earning years without having saved enough for the retirement they envisioned. A Bankrate survey found that 57 percent of Americans are behind on their retirement savingsโ€”a trend that appears to be particularly pronounced among older workers. Specifically, 68 percent of Gen X workers (ages 44โ€“49) and 66 percent of baby boomers (ages 60โ€“78) feel that they are behind on their retirement savings.

Moreover, AARP research shows 20 percent of people over 50 donโ€™t have retirement savings. Additionally, over half (61 percent) worry about having insufficient funds for retirement.

Itโ€™s not all bad news, though. To enhance your retirement savings, the IRS offers you a powerful toolโ€”catch-up contributions.

For workers aged 50 and older, these extra contributions enable you to contribute more to retirement accounts, such as 401(k)s and IRAs. By using catch-up contributions strategically, you can close the savings gap and secure a more comfortable retirement.

In this post, we examine how they work and how you can take advantage of them.

What Exactly Are Catch-Up Contributions?

Essentially, catch-up contributions are additional allowances the IRS permits individuals over 50 to make by the end of the calendar year. And, believe it or not, itโ€™s actually a straightforward philosophy. If you were unable to save together earlier in your career, you have a chance to โ€œcatch upโ€ as you approach retirement. The reason for this might include starting a family, navigating economic downturns, or simply starting to save later in life.

According to their respective catch-up allowances for the year 2025, these retirement accounts have the following standard contribution limits:

  • 401(k)s and similar workplace plans. The catch-up contribution in 2025 is $7,500, bringing the total contribution to $31,000. Starting in 2025, individuals aged 60โ€“63 can contribute even more to their 401(k)s and specific other employer-sponsored plans, up to $11,250, as part of the โ€œSuperโ€ catch-up contribution program.
  • IRAs. In 2025, the catch-up contribution is $1,000, bringing the total contribution to $8,000.
  • SIMPLE IRAs. The standard contribution limit for SIMPLE IRAs is $16,500. For those 50 and older, however, the catch-up contribution is $3,500, resulting in a total of $23,500.
  • HSAs. For those age 55 or older, catch-up contributions to Health Savings Accounts (HSAs) increase by $1,000 in 2025. For individual plans, the total potential contribution is $5,300 ($4,300 base + $1,000 catch-up), and for family plans, it is $9,550 ($8,550 base + $1,000 catch-up).

Itโ€™s essential to note that these limits apply per person. In other words, if youโ€™re married and both you and your spouse are over 50, you can effectively double these amounts. For example, a married couple over 50 could contribute $61,000 to their 401(k)s and $16,000 to their IRAs every year. Suffice it to say, thatโ€™s a substantial boost to your savings.

Byย Due

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