Workers aged 60 to 63 are now allowed to save up to $35,000 annually in their 401(k) plans under a new “super catch-up” contribution rule. This provision, part of the SECURE 2.0 Act passed in 2022, aims to help older employees boost retirement savings in their final working years.
Despite the increased limit, participation remains extremely low. Recent data shows that only a small fraction of eligible workers actually take advantage of the super catch-up option.
Most people simply do not have the available discretionary income to max out such a high contribution limit. The $35,000 threshold represents a significant portion of the median household income for many older workers.
Financial advisors point out that even standard catch-up contributions, which allow workers 50 and older to save an extra $7,500, are underutilized. The new super catch-up adds an additional $11,250 on top of that.
Industry analysts suggest the rule primarily benefits high-income earners who already have substantial savings. For the average worker, covering living expenses and other financial priorities takes precedence.
Employers report little change in enrollment patterns since the higher limit took effect. Few plan participants have altered their contribution rates specifically to reach the new maximum.
The low uptake raises questions about the effectiveness of such policies. While designed to encourage retirement readiness, the super catch-up may only serve a narrow demographic with significant financial flexibility.
