What Is the Over 50 Catch-Up for a 401(k)?

A 401(k) catch-up contribution is a provision in tax law designed to help workers accelerate their retirement savings. It allows those nearing retirement age to contribute more to their 401(k) plans than the standard annual limit set for all employees. The purpose of this additional contribution is to bolster a retirement nest egg, offering a way to compensate for years of lower savings. By allowing for higher contribution amounts, it helps people work toward a more financially secure retirement.

Eligibility and Contribution Limits

To be eligible to make 401(k) catch-up contributions, an individual must be age 50 or older by the end of the calendar year. An individual is considered to have met the age requirement on the first day of the calendar year in which they turn 50, allowing them to make these extra contributions for the entire year. This eligibility is not dependent on income or how much one has already saved.

The Internal Revenue Service (IRS) sets the contribution limits annually. For 2025, the standard employee contribution limit to a 401(k) is $23,500. The catch-up contribution limit for those age 50 and over is an additional $7,500, making the total possible contribution $31,000. These limits, which also apply to 403(b) and governmental 457(b) plans, are subject to cost-of-living adjustments.

A special, higher catch-up limit exists for certain employees under the SECURE 2.0 Act. Individuals aged 60, 61, 62, and 63 have a higher catch-up limit. For 2025, this increased amount is $11,250, allowing for a total contribution of $34,750 for those in this specific age bracket.

How to Make Catch-Up Contributions

Making catch-up contributions is not an automatic process and requires a specific election by the employee. You must proactively inform your employer or plan administrator of your intent to contribute more than the standard limit, as simply being eligible does not mean the additional contributions will be made.

The most common method for setting up these contributions is through an online benefits or payroll portal provided by the employer. In this portal, employees can manage their 401(k) elections and specify the amount they wish to contribute from each paycheck. You will need to designate a specific dollar amount or a percentage of your salary to be deferred as a catch-up contribution.

If an online portal is not available or if you need assistance, you should contact your company’s human resources department or the 401(k) plan administrator directly. They can provide the necessary forms or instructions to make your election and initiate the additional payroll deductions.

Important Rules for Catch-Up Contributions

Plan administrators apply a “spillover” method, where your contributions first go toward satisfying the regular elective deferral limit for the year ($23,500). Only after this standard limit has been reached will any subsequent contributions be classified as catch-up contributions. This ensures that all employees first meet the standard threshold before the additional amounts are applied.

The tax treatment of your catch-up contributions mirrors that of your regular 401(k) deferrals. If you contribute to a traditional, pre-tax 401(k), your catch-up amounts will also be pre-tax, reducing your current taxable income. If you use a Roth 401(k), your catch-up contributions will be made on an after-tax basis, allowing for tax-free qualified withdrawals in retirement.

A significant change introduced by the SECURE 2.0 Act affects high-earning individuals. Beginning in 2026, employees who earned more than $145,000 in the prior calendar year from their current employer will be required to make their catch-up contributions to a Roth account. This means the contributions will be made with after-tax dollars. If an employer’s plan does not include a Roth option, these high-earners will not be able to make any catch-up contributions at all.