What changed under SECURE 2.0

The SECURE 2.0 Act introduced a new, higher catch-up contribution limit specifically for 401(k) participants ages 60, 61, 62, and 63. Effective in 2026, this enhanced catch-up allows these participants to contribute up to $11,250 above the standard employee deferral limit — significantly more than the standard age-50+ catch-up of $7,500.

The numbers for 2026 for a qualifying participant age 60–63:

• Standard employee deferral limit: $23,500
• Enhanced catch-up contribution: up to $11,250
• Total potential contribution: up to $34,750 (plus any employer match on top)

At age 64, the enhanced catch-up ends and participants revert to the standard age-50+ catch-up of $7,500.

The catch: plan adoption is required

The enhanced catch-up contribution is not automatic. It is available only through employer-sponsored plans (401(k), 403(b), and SIMPLE IRA with modifications) that have adopted the relevant SECURE 2.0 provisions.

Before assuming this opportunity is available, confirm with your employer’s HR department or plan administrator whether the plan has adopted the enhanced catch-up feature for participants ages 60–63. Not all plans have updated their documents to include this provision.

The Roth catch-up rule for higher earners

SECURE 2.0 also introduced a rule that affects catch-up contributions more broadly: starting in 2026, participants who earned more than $145,000 in wages from the employer in the prior year (indexed for inflation) must make their catch-up contributions — whether standard or enhanced — as Roth (after-tax) contributions rather than pre-tax.

For higher-earning South Jersey professionals in their early 60s, this means:

• The catch-up contribution will not reduce taxable income in the year it is made
• The contribution grows tax-free and is withdrawn tax-free in retirement
• This may be advantageous for those expecting higher future tax rates — but it requires cash flow to cover the current tax on the contribution

Why this matters for the pre-retirement decade

For a South Jersey family where the primary earner is between 60 and 63, this window represents one of the most powerful retirement savings opportunities available:

• Reducing taxable income by up to $34,750 in a year (for those making pre-tax contributions below the $145,000 threshold)
• Accelerating retirement account balances in the final years before Social Security and Medicare decisions must be made
• Creating a larger base for the Roth conversion strategy in the years between retirement and age 73

The 60–63 window is also typically when income is at or near its peak, making the pre-tax deduction maximally valuable.

The WealthCare perspective

The enhanced catch-up for ages 60–63 is one of the least-known planning opportunities created by SECURE 2.0. We review catch-up contribution eligibility as a standard part of the WealthCare Process for clients in this age range — and specifically check whether employer plans have adopted the provision before recommending the strategy.

For clients who work with their own business and sponsor their own retirement plan, SECURE 2.0’s provisions offer even more flexibility. If you own a business and want to understand your options, that is a conversation worth having.

What to do next

If you are between ages 60 and 63 and want to understand whether this opportunity applies to your plan, contact our team at (856) 988-7722 or familywealthadvisory.com.