Can You Contribute to a 401k After Age 65?

A growing number of individuals are choosing to work well beyond the traditional age of 65, raising important financial questions for older workers. As people extend their careers, they often seek ways to continue building their nest egg. Understanding the rules that govern retirement savings vehicles becomes a central part of financial planning in these later working years.

Eligibility for Contributions Past Age 65

There is no maximum age limit for contributing to a 401(k) plan. An individual can continue to make contributions as long as they are employed by a company that offers a 401(k) and are receiving compensation for their work. Federal law prohibits age-based discrimination that would prevent an otherwise eligible older employee from participating in a plan.

The primary requirement for making contributions is having earned income. For 401(k) eligibility, earned income refers to compensation such as wages, salaries, commissions, and bonuses paid by an employer for personal services rendered. Income from investments, pensions, or Social Security benefits does not qualify as earned income for this purpose.

This means a 75-year-old part-time employee has the same right to contribute as a 35-year-old full-time employee, provided they meet the plan’s general eligibility requirements, which are based on service hours and not age. The ability to continue saving is tied directly to employment status.

Contribution Rules and Limits

Workers over the age of 65 who are contributing to a 401(k) are subject to the same annual contribution limits set by the Internal Revenue Service (IRS) as younger participants. For 2025, the standard employee contribution limit is $23,500. This amount represents the maximum that an employee can defer from their salary into their 401(k) account for the year, and these limits apply to the combined total of any pre-tax and Roth 401(k) contributions.

An advantage for older workers is the ability to make “catch-up” contributions. This provision is available to individuals age 50 and over, allowing them to save an additional amount above the standard limit. For 2025, the catch-up contribution amount is $7,500. This means a worker aged 65 can contribute a total of $31,000 to their 401(k) in 2025, which is the sum of the standard limit and the catch-up amount ($23,500 + $7,500).

A new rule effective in 2025 allows for a larger catch-up contribution for those aged 60 to 63, set at $11,250, though this reverts to the standard $7,500 for those 64 and older. Employees contributing after age 65 also remain eligible for any employer matching contributions offered by their plan. These employer contributions do not count against the employee’s personal deferral limits but are part of a separate, larger overall limit. For 2025, this combined limit is $70,000, or $77,500 for those eligible for the standard catch-up.

Required Minimum Distributions and the Still Working Exception

While continuing to contribute to a 401(k) is straightforward, the rules around withdrawals become a factor. The IRS mandates that individuals begin taking Required Minimum Distributions (RMDs) from their tax-deferred retirement accounts. Under current law, these withdrawals must begin once an individual reaches age 73. The RMD is a calculated amount that must be withdrawn annually, ensuring that taxes are eventually paid on the deferred savings.

A provision called the “still working exception” can provide relief from this rule. If an individual is still employed by the company that sponsors their 401(k) when they reach RMD age, they can delay taking RMDs from that specific plan. This exception allows the funds in their current employer’s 401(k) to continue growing until April 1 of the year after they retire.

This exception has limitations. It only applies to the 401(k) plan of the current employer. An individual must still take RMDs from other retirement accounts, such as Traditional IRAs, SEP IRAs, and 401(k)s from previous employers. Another restriction is that the exception is not available to individuals who own more than 5% of the company they work for. For these business owners, RMDs from their company’s 401(k) must begin at age 73, regardless of their employment status.