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A recent call with a financial advisor in California is representative of a common question on the changes to 401(k) catch-up contributions under SECURE 2.0.
Welcome to the Retirement Learning Center’s (RLC’s) Case of the Week. Our ERISA consultants regularly receive calls from financial advisors on a broad array of technical topics related to IRAs, qualified retirement plans, and other types of retirement savings and income plans, including nonqualified plans, stock options, Social Security, and Medicare. This is where we highlight the most relevant topics affecting your business.
“I have a client who participates in a 401(k) plan and was age 63 at the beginning of 2026. They turn 64 in a few months. Are they eligible to make an increased catch-up contribution under SECURE 2.0 for 2026?”
The IRS’s final catch-up contributions regulations make clear that a participant may be eligible for the increased catch-up amount for a taxable year if they attain age 60, 61, 62, or 63 during the year [Treas. Regs. § 1.414(v)-1(c)(2)(i)(B)]. Therefore, a participant who was age 63 at the beginning of 2026 (and thus will attain age 64 during 2026) will not be eligible for the increased catch-up amount for 2026. The individual could still be eligible for the age-50 catch-up limit, however.
Section 109 of the SECURE Act 2.0 amended the Internal Revenue Code to increase the 401(k) plan catch-up contribution limit to $11,250 for participants age 60-63, effective January 1, 2025. The IRS will make cost-of-living adjustments to the age-60-63 limit separately from the age-50 catch-up limit (currently $8,000). For example, the age-50 catch-up limit increased from $7,500 to $8,000 for 2026, but the age-60-63 catch-up limit remained at $11,250.
The increased age-60–63 catch-up contribution limit is optional and applies only if the plan permits it. Therefore, 401(k) plan sponsors who wish to permit the increased catch-up contribution limit must amend their plans by the SECURE 2.0 amendment deadline of December 31, 2026.
Plan permitting, the increased age-60-63 catch-up contribution limit applies to eligible participants who attain age 60, 61, 62, or 63 during the taxable year.