Starting next year, Americans aged 60-63 will be able to contribute up to $11,250 in extra funds to their 401(k)s, 403(b)s, or 457(b) plans, thanks to the SECURE Act 2.0. This act allows retirees to increase their retirement savings significantly, providing a crucial financial boost for those nearing retirement age.
The enhanced catch-up contribution limit is $10,000 or 150% of the standard age 50+ catch-up contribution limit, whichever is greater, ensuring that savers can add substantial funds to their retirement accounts.
The change aims to help those who may have previously lagged in contributions ramp up their retirement savings, though only 15% of those with workplace retirement plans made the normal catch-up contribution last year, indicating a need for increased participation.
As a result of the SECURE Act 2.0, by 2025, those aged 60-63 could potentially contribute a total of up to $34,750, strengthening financial security for retirement if employers accommodate these increases.
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