This year, a new provision allows workers aged 60 to 63 to make an additional catch-up contribution of $11,250 to their employer-sponsored 401(k), providing a vital boost for those behind on retirement savings. In total, this age group can contribute up to $34,750, significantly more than the $7,500 catch-up for those over 50. While 401(k)s already offer benefits like employer matching and higher contribution limits compared to IRAs, this new rule enhances the opportunity for late savers to catch up and fortify their retirement income.
Employer-sponsored 401(k)s offer workers a special super catch-up contribution of $11,250 for those aged 60-63, significantly boosting retirement savings options.
The new super 401(k) catch-up allows eligible workers aged 60-63 to contribute a total of $34,750 to their retirement accounts, enhancing savings for those nearing retirement.
In 2025, individuals under 50 will be able to contribute up to $23,500 to a 401(k), highlighting the significant advantages of employer-sponsored plans over IRAs.
Due to higher contribution limits and employer matching benefits, 401(k)s can be a more strategic vehicle for retirement savings compared to traditional IRAs.
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