Catch-Up Contribution
An additional retirement account contribution allowed for savers aged 50 and older under IRS rules.
What is Catch-Up Contribution?
A catch-up contribution is an additional annual contribution permitted by the IRS for individuals aged 50 or older to make to certain tax-advantaged retirement accounts, above and beyond the standard annual limit. The provision, established by the Economic Growth and Tax Relief Reconciliation Act of 2001, allows older workers to accelerate retirement savings as they approach retirement age. For 2025, eligible participants may contribute an extra $7,500 to a 401(k), 403(b), or most 457 plans (on top of the $23,500 standard limit), and an extra $1,000 to traditional or Roth IRAs (on top of the $7,000 limit). The SECURE 2.0 Act of 2022 introduced enhanced catch-up rules for participants aged 60–63, allowing even higher contributions beginning in 2025.
Example
A 52-year-old earning $130,000 who maxes out her 401(k) at the standard $23,500 limit can make an additional $7,500 catch-up contribution in 2025, for a total of $31,000 — all pre-tax. Over 10 years to age 62, those extra contributions add approximately $109,000 assuming 7% annual growth — a meaningful boost for someone who prioritized family expenses earlier in their career over maximizing retirement savings.