Catch Up for a More Comfortable Retirement
A 2024 survey found that only a third of U.S. workers age 50 and older feel that their savings contributions have them on track to enjoy a comfortable retirement.1 If your retirement account balance is lagging — or even if your nest egg seems robust — you can give your savings a boost by taking advantage of catch-up contributions that are available to those age 50 or older. This is often a time when salaries are highest, and you may thank yourself later if you put your current income to work for the future.
This opportunity is available for IRAs and employer-sponsored retirement plans — and there is a new opportunity in 2025 for some workers to make even bigger contributions to employer plans. You might be surprised by how much your savings could grow late in your working career.
Employer plans
Employer plans offer the most generous tax-advantaged contribution limits, and employers often match employee contributions up to a certain percentage of salary. Employer plan contributions for a given tax year must be made by December 31 of that year, but employers will generally allow you to adjust your contributions during the year.
For 2025, the individual contribution limit for 401(k), 403(b), and government 457(b) plans is $23,500, with an additional $7,500 catch-up contribution for those age 50 and older, for a total of $31,000. However, beginning in 2025, workers age 60 to 63 can make a larger catch-up contribution of $11,250 for a total of $34,750. Like all catch-up contributions, the age limit for this “super catch-up” is based on age at the end of the calendar year. It is not prorated, so you are eligible to make the full $11,250 contribution if you are age 60 to 63 at any time during 2025 and do not turn 64 by the end of the year.
SIMPLE retirement plans have lower but still generous limits: $16,500 in 2025 plus an additional $3,500 catch-up contribution for employees age 50 and older or an additional $5,250 for employees age 60 to 63. (Some plans have higher standard and age-50 catch-up limits: $17,600 and $3,850, along with the $5,250 super catch-up.)
IRAs
Unlike contributions to employer plans, IRA contributions can be made for the previous year up to the April tax filing deadline. So you can make contributions for 2025 up to April 15, 2026. Make sure your IRA administrator knows which year the contributions are for.
The federal contribution limit in 2025 for all IRAs combined is $7,000, plus a $1,000 catch-up contribution for those 50 and older — for a total of $8,000. An extra $1,000 might not seem like much, but it could make a big difference by the time you’re ready to retire. If only one spouse is working, a married couple filing a joint return can contribute to an IRA for each spouse as long as the working spouse has earned income that is at least equivalent to both contributions.
Savings Boost
Additional amounts that might be accrued between age 50 and age 65 or 70, based on making maximum annual contributions at current limits to an IRA or an employer-sponsored plan (includes additional catch-up for ages 60 to 63)
Assumes a 6% average annual return. If annual inflation adjustments to maximum contribution amounts were included, actual totals could be higher.
This hypothetical example of mathematical compounding is used for illustrative purposes only and does not represent any specific investment. It assumes contributions are made at end of the calendar year. Rates of return vary over time, particularly for long-term investments. Fees and expenses are not considered and would reduce the performance shown if they were included. Actual results will vary.
IRA MAGI limits
IRA contributions up to the combined limit can be traditional, Roth, or both. If an individual is an active participant in an employer-sponsored retirement plan, the ability to deduct traditional IRA contributions phases out in 2025 at a modified adjusted gross income (MAGI) of $79,000–$89,000 for single filers or $126,000–$146,000 for joint filers ($77,000–$87,000 and $123,000–$143,000 in 2024). If one spouse is an active participant in an employer-sponsored plan and the other is not, deductions for the nonparticipant phase out from $236,000–$246,000 in 2025 ($230,000–$240,000 in 2024).
The ability to contribute to a Roth IRA phases out in 2025 at a MAGI of $150,000–$165,000 for single filers and $236,000–$246,000 for joint filers ($146,000–$161,000 and $230,000–$240,000 in 2024).
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