Aire Images | Moment | Getty ImagesHigher 401(k) catch-up contributionsEmployees can now defer up to $23,000 into 401(k) plans for 2024, with an extra $7,500 for workers age 50 and older.
But starting in 2025, workers aged 60 to 63 can boost annual 401(k) catch-up contributions to $10,000 — or 150% of the catch-up limit — whichever is greater.
An estimated 15% of eligible workers made catch-up contributions in 2023, according to Vanguard's 2024 How America Saves report.
Roth catch-up contributionsAnother Secure 2.0 change will remove the upfront tax break on catch-up contributions for higher earners by only allowing the deposits in after-tax Roth accounts.
That means workers can still make pretax 401(k) catch-up contributions through 2025, regardless of income.
Persons:
Jamie Bosse, Vanguard's Stinnett, Roth
Organizations:
IRS, CGN Advisors, America, Vanguard
Locations:
Manhattan , Kansas