There’s a key change coming to 401(k) catch-up contributions in 2025

Many Americans are facing a retirement savings shortfall, but some relief may be on the way in 2025 thanks to the Secure Act 2.0. This legislation has brought several improvements to the retirement system, including updates to 401(k) plans and catch-up contributions. Starting in 2025, workers aged 60 to 63 will be able to boost their annual 401(k) catch-up contributions to $10,000, or 150% of the catch-up limit, whichever is greater. This change could help higher earners who are concerned about retiring comfortably. Another change will require higher earners to make catch-up contributions to Roth accounts instead of traditional accounts, but this rule won’t be implemented until January 2026.