One of the most valuable perks of a 401(k) is its high contribution limits. In 2025, adults under 50 can contribute up to $23,500 to one of these accounts, and this doesn’t include any match their employer might make on their behalf.

Adults 50 and older are able to save even more. In 2025, most among this group can set aside up to $31,000. However, a recent rule change has given a subset of these older workers the opportunity to save a record-high amount.

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Adults aged 60 to 63 can now make a larger catch-up contribution

The additional $7,500 that workers 50 and older are eligible to contribute to a 401(k) is known as a catch-up contribution. A SECURE 2.0 Act rule change that went into effect Jan. 1 now enables adults who will be between the ages of 60 and 63 by the end of 2025 to make an even larger catch-up contribution.

They can set aside up to $11,250 on top of the $23,500 standard contribution limit. This brings their maximum 2025 contribution to $34,750. This could increase in future years due to inflation.

The way the law is set up right now, the higher catch-up contribution limit only applies to a subset of older workers. Once you turn 64, you’ll be back to the standard $7,500 catch-up contribution, though this, too, could increase over time.

How to maximize your 401(k) contributions in 2025

Larger catch-up contributions are a bonus if you have a lot of extra cash to spare. But this is going to be most advantageous to those in positions of power who are earning high salaries and looking for a way to shield a portion of this from taxation today while also saving for their future. Those with lower salaries may not be able to take advantage of catch-up contributions even if they’d like to.

However, there are still things these workers can do to improve their retirement readiness, starting with contributing as much as they can to their 401(k)s. It’s OK if this is under the $31,000 limit for most adults 50 and older or even if it’s under the $23,500 standard contribution limit. Every dollar you set aside for your future matters.

If you qualify for a 401(k) match through your employer, try to claim the full match in 2025 if you’re able to. Check with your HR department if you’re unsure how its matching structure works. Once you’ve determined the amount you must contribute to get your full match, divide this by the number of pay periods remaining in the year to figure out how much you must save per pay period to meet your goal.

Those who are expecting a raise in 2025 should consider deferring some or all of that extra cash to their 401(k). It’s best to decide how much you’ll set aside upfront rather than waiting to see how much you have left over at the end of the month. Otherwise, lifestyle creep could cause you to spend your entire raise.

Finally, keep an eye out for future 401(k) rule changes and increases to the contribution limits. Even if you’re not able to set aside that much right now, you may find yourself in a better financial position in a future year, and you can then take advantage of these higher limits.

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