Secure 2.0 Catch-Up Contributions

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The SECURE 2.0 Act of 2022 introduces a new catch-up contribution limit for active participants aged 60 through 63, effective for the 2025 tax year. Participants in this age group can contribute the greater of $10,000 or 150% of the 2024 catch-up contribution limit.

Is It Mandatory?

Experts from Groom Law Group and CAPTRUST clarify that this provision is not mandatory. It is an amendment to Internal Revenue Code Section 414(v), which already allows catch-up contributions for those aged 50 or older. Since the age-50 catch-up is optional, so is the age 60-63 catch-up election.

Implementation by Employers

There is still uncertainty about whether employers with multiple plans must offer this new catch-up provision across all plans or can decide on a plan-by-plan basis. This remains an area for further clarification as the provision's effective date approaches.

By understanding these new rules, employers and plan participants can better navigate their retirement planning options under the SECURE 2.0 Act.

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