Age-Based Savings Benchmarks How Your 2025 Nest Egg Should Compare to Your Current Salary - Catch Up Contributions in 2025 Allow Extra $11,250 for Ages 60-63

From the data available, it seems the SECURE 2.0 Act introduces some interesting changes for those nearing retirement, specifically targeting the 60-63 age group. Starting in 2025, individuals in this bracket will be allowed to make "super" catch-up contributions to their retirement plans, up to an additional $11,250. This is calculated as the greater of $10,000 or 150% of the regular catch-up limit for those 50 and over, which is $7,500 through 2024. This applies to 401(k), 403(b), and governmental 457(b) plans, but not IRAs, it appears, as their catch-up contribution remains fixed at $1,000 for those 50 and above. Interestingly, only about 15% of eligible plan participants currently take advantage of catch-up contributions. One wonders why this number is so low - lack of awareness or perhaps financial constraints? It's also worth noting that these catch-up contributions will be adjusted for the cost of living annually. This is a crucial point, but will these adjustments actually keep pace with inflation in a meaningful way? A bit of a cynical thought is that these increased contribution limits might disproportionately benefit higher earners, potentially exacerbating wealth disparity. It's a complex issue, no doubt, and only time will tell what the real-world impact of these changes will be.