New 401(k) Catch-Up Revisions: What Savers Need to Know

Recent updates to retirement legislation are bringing meaningful changes to 401(k) catch-up contributions, giving older workers new opportunities to boost their retirement savings.

One of the biggest revisions impacts workers ages 60 to 63. Beginning in the coming plan years, individuals in this age range will be allowed to make larger catch-up contributions than the standard age-50-plus limit. This enhanced catch-up is designed to help those nearing retirement accelerate savings during their peak earning years.

Another important change affects high-income earners. Under updated rules, certain employees who earn above an IRS-defined threshold will be required to make catch-up contributions on a Roth (after-tax) basis, rather than pre-tax. While the implementation date has been delayed to allow plan sponsors more time to prepare, this shift will eventually change how some savers structure their contributions.

The good news? These revisions are aimed at increasing flexibility and long-term retirement readiness. However, they also add complexity, making it more important than ever to review your retirement strategy, contribution limits, and tax planning approach.

If you are over 50—or approaching retirement age—now is a great time to revisit your 401(k) plan and ensure you’re taking full advantage of the new rules.

A Charitable RMD, also called a Qualified Charitable Distribution (QCD), is a wonderful way to make a difference while using your retirement savings wisely. If you’re age 70½ or older, you can give directly from your IRA to a qualified charity—helping the causes you care about most while also reducing your taxable income. It’s a heartfelt way to turn your required distribution into something truly meaningful. Many clients find it rewarding to see their generosity make an impact right now. If you’d like to learn more or see how it could work for you, we’d be happy to help!

As a gentle reminder, the safest and most reliable way to request any money withdrawal from your account is by calling our office directly. In today’s environment, where online scams and identity fraud have become more sophisticated, speaking with one of our team members ensures your request is handled securely and accurately. A quick phone call allows us to verify your identity, confirm details in real time, and protect your funds from unauthorized access. We appreciate your understanding and partnership in helping us keep your accounts and personal information safe.

We’re excited to welcome a new group of Normal Community High School interns to our Bloomington office this semester. They’ll be spending a few hours each week with us over the coming weeks learning more about the finance field so they can grow their understanding of business and finance as they pursue their academic goals. You can learn more about them in our upcoming newsletter. And if you stop in to our Bloomington office over the next couple of months, be sure to say hello and welcome them!

Have you considered including family in conversations about finances and how you would like your estate handled at your death?

These can be difficult conversations, but so worthwhile. We’ve had clients invite children/beneficiaries and their attorney to an annual review so everyone is on the same page. If you’re interested in a Beneficiary Book, which is a binder to keep all your pertinent information in one place, give our office a call and we’ll have one ready for you to pick up. Also, keep an eye out for our “Educating Executors” seminar coming this fall to our Bloomington office.