Workers age 60 and older can now make substantially larger contributions to their retirement accounts, thanks to expanded catch-up rules that took effect this year. The IRS increased catch-up contribution limits for 401(k)s, 403(b)s, and most 457 plans, allowing older workers to save an additional $7,500 on top of standard limits.
For 2024, workers age 50 and up can contribute $23,500 to a 401(k). Those age 60 through 63 can now add another $7,500 catch-up contribution, reaching $31,000 total per year. This represents the first major expansion of catch-up rules in over a decade and applies only to those within three years of the retirement plan's normal retirement age.
Individual Retirement Accounts (IRAs) offer their own catch-up option. Workers age 50 and older can contribute an extra $1,000 annually on top of the standard $7,000 limit, bringing the total to $8,000.
The new rule targets workers who fell behind on retirement savings during their peak earning years. Someone earning a solid salary at age 60 can now redirect more income toward tax-advantaged growth before taking withdrawals. The tax deferral accelerates compounding in the final years before retirement.
This benefit expires after age 63 unless Congress extends it. Workers age 64 and older revert to standard catch-up limits of $7,500 for 401(k)s. Planning matters here. A 60-year-old with employer matching should max out contributions immediately to capture free company money while also leveraging the expanded catch-up window.
The rule applies only to those with income sufficient to make the contributions. Self-employed workers can use Solo 401(k)s to capture similar benefits. Those