Those turning 64 years old are celebrating what they are referring to as their “Beatles Birthday.’’ To provide some context, in 1967, the Fab Four released the song “When I’m 64’’ from their iconic Sgt. Pepper’s Lonely Hearts Club Band album.

The reason for the Beatles analogy is that it ties into a key change coming in 2025, due to new retirement rules. That is something every savvy and diligent financial advisor should know about and be prepared for.

The 2025 Catch-Up Contribution Change: What’s New?

The SECURE 2.0 Act, which passed Congress in December 2022, provided significant changes to how employees can contribute to their employer sponsored retirement plans such as 401(k) and 403(b) plans. While these qualified plan changes are being phased in over several years, there is one major shift that kicked in January 2025 that will impact those who are approaching retirement age. Individuals who turn 60, 61, 62, or 63 in 2025, will have a special catch-up contribution advantage limited to people in this age category. Luckily for them, this new “enhanced” catch-up contribution could potentially lower their taxable income during these specific years and help them save more for retirement. The enhanced catch-up contribution limit is $10,000 or 150% of the standard age 50+ catch-up contribution limit, whichever is greater.

For example, participants in that age range may contribute an additional $11,250 instead of the standard $7,500. As noted in the table below, there is no increase in catch-up contribution limits for taxpayers 50-59 and 64 or older for 2025. These taxpayers can still contribute an additional $7,500 in 2025, up to $31,000 in total.

2025 Enhanced Catch-up Contribution

Participant Age in 2025	2025 Standard Annual Deferral Limit	Catch-up Contribution for 2025	Total 2025 Annual Contribution Limit
50-59 OR 64 or older	$23,500	$7,500	$31,000
60-63	$23,500	$11,250	$34,750

Source IRS Website

Two Key Things to Know:

• This enhanced catch-up change is optional for employers. Each plan sponsor will decide whether to implement this feature in their retirement plans.
• In the year, the participant turns 64, (hence the Beatles reference) their catch-up contribution returns to the standard $7,500 (2025) which governs all plan participants over the age of 50.

The Goal: SECURE 2.0 is great news for those who have fallen behind in their retirement savings and now can increase savings during pre-retirement years. Sadly, there are so many individuals who were unable to save a significant amount due to student loans, economic downturns, the overwhelming costs of raising a family or unexpected expenses that inevitably arise and wreak havoc on their finances. These financial constraints and setbacks can leave a lot of people with little room to save for the future. Now, thanks to SECURE 2.0, people approaching retirement age will have a chance to catch up even more on their savings and hopefully make up for lost time.

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Myles is a Founder and Principal of Wealthcare Advisors and Consultants, LLC., guiding not-for-profit organizations, families, and individuals through some of the most complex financial transitions. In addition, he is an esteemed educator and Subject Matter Expert for retirement, investment management and charitable giving at Cannon Financial Institute. With over 40 years of solid expertise, Myles has held leadership roles at major financial institutions including US Bank, Wilmington Trust, and Chase Manhattan Bank. He is a sought-after media voice sharing crucial insights on the latest trends, strategies, and technologies in his field with various publications.

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