Catch-Up Contributions and Retirement Savings Maximization for Pre-Retirees

If you’re age 50 or older, catch-up contributions allow you to put extra money in your retirement accounts, beyond the annual limits.

The closer you get to retirement age, the more valuable those accelerated savings become. Even in your 50s, any additional contributions you make to your retirement accounts will have time to accumulate and compound before you officially retire.

Some of the plans that allow catch-up contributions include:

• 401(k)s
• 403(b)s
• Governmental 457 Plans
• SIMPLE 401(k)s
• IRAs
• SIMPLE IRAs
• and Health Savings Accounts (HSAs) 

Catch-up limits vary by account type and investor age, but it’s important that you know your options so you can make the most of your contributions.

Understanding Catch-Up Contribution Basics

There are multiple factors that affect contribution amounts.

Age is one important factor. If you want to make a catch-up contribution to a 401(k), 403(b) or 457 plan, for example, you can contribute an additional $7,500 in 2025 if you’re at least 50 years old. However, if you’re 60-63 years old, you can make a “super catch-up” contribution of $11,250. That allows you to put away even more money before you reach the traditional retirement age of 67.

The type of account also determines how much you can contribute beyond the typical limits. Some of those catch-up limits for 2025 include:

• 401(k)s, 403(b)s and Governmental 457 Plans: $7,500 for ages 50 and over, $11,250 for ages 60-63
• SIMPLE 401(k)s: $3,500 for ages 50 and over, $5,250 for ages 60-63
• IRAs: $1,000 for ages 50 and over
• SIMPLE IRAs: $3,500 for ages 50 and over, $5,250 for ages 60-63
• Health Savings Accounts (HSAs): $1,000 for ages 50 and over

Tax implications and Benefits

Some catch-up contributions are subject to tax liabilities, so it’s important to be aware of what you might owe when adding more to your accounts.

The cost-of-living adjustment (COLA) is the amount a limit should increase each year to keep pace with the cost of living, which impacts the annual catch-up thresholds.

In 2026, in accordance with the Secure Act 2.0, there is a change coming to how catch-up contributions affect your taxable income. Beginning after Dec. 31, 2025, income earners over $145,000 will have to make catch-up contributions in an employer-sponsored retirement plan with after-tax dollars, and put that money into a Roth account. That means – if this rule applies to you – you will not get a tax deduction for your catch-up contribution.

Retirement Account Options for Catch-Up Contributions

Traditional IRA Catch-Up Strategies

A Traditional IRA (Individual Retirement Account) is a tax-advantaged retirement account. In 2025, the contribution limit is $7,000, with a $1,000 catch-up amount for those aged 50 and older. 

Your contribution may be tax-deductible depending on your income, and whether or not you and/or your spouse participates in an employer-sponsored retirement plan. 

As you approach retirement, consider how required minimum distributions (RMDs) will impact your tax burden. Currently, IRA account holders are required to begin taking distributions by age 73.

401(k) Maximization Techniques

In 2025, the standard 401(k) employee contribution limit is $23,500, with an additional $7,500 in catch-up contributions for those aged 50 and older. 

If it’s financially feasible for you, aim to contribute the full amount. 401(k) contributions are tax-deferred, meaning you won’t owe any income tax on that money until you withdraw funds in retirement. Contributions you make now also decrease your taxable income.

Don’t forget to take full advantage of employer matching. Many companies offer 401(k) employee matching up to a certain amount, so try to hit the highest threshold to get as much as you can from your company’s match program. 

Roth IRA Considerations

A Roth IRA offers tax-free growth and withdrawals in retirement. The 2025 contribution limit is $7,000, with a $1,000 catch-up contribution for those aged 50 and older, allowing for a total of $8,000.

If you have a Traditional IRA account, you can use a Roth conversion to move pre-tax Traditional IRA funds into your Roth IRA, which allows you to pay taxes now for tax-free withdrawals later.

You can also delay your Roth IRA withdrawals to let your money grow tax-free as long as possible. That’s because, unlike some other retirement accounts, Roth IRAs do not have RMDs.

Note that Roth IRAs do have income limits ($150,000 for single filers, $236,000 for married filing jointly in 2025). But if you are eligible, a Roth IRA is another useful tool for maxing out your retirement savings.

HSA Catch-Up Opportunities

A Health Savings Account (HSA) offers a triple tax benefit: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. In 2025, individuals aged 55 and older can contribute an additional $1,000 catch-up contribution on top of standard limits, which are $4,300 for individuals, and $8,550 for families.

HSA funds roll over, so you can continue to contribute year after year. HSAs are also eligible for Medicare and medical expenses, making them a powerful tool for covering health costs in retirement.

HSAs do not have RMDs, so you can allow the funds in your account to grow as long as you’d like.

Maximizing Multiple Retirement Accounts

Using multiple retirement accounts can be an effective way to make the most of your retirement savings, but it can also be tricky to coordinate multiple accounts, limits and rules. Here’s how to manage more than one retirement account:

Prioritizing Different Account Types

Each retirement account serves a unique purpose, and prioritizing contributions depends on factors like employer benefits, tax treatment, and investment flexibility. For example, if your workplace offers an employee match program for retirement accounts, you should definitely focus on maxing out that account first.

After that, contributing to Roth IRAs, Traditional IRAs and HSAs allow for a diversified tax benefit strategy. Think about your current tax and income situation to determine which additional retirement account will work best for you.

Tax-Efficient Contribution Strategies

When you are in a higher income bracket, it often makes sense to contribute to accounts like a Traditional 401(k) or IRA to reduce your taxable income.

Or, if you’re in a lower tax bracket now, you can use a Roth IRA or Roth 401(k) to provide tax-free withdrawals in retirement.

The goal is to find a tax-efficient strategy that will save you the most money overall, now and later. 

Strategic Planning for Late-Career Savers

If you’re approaching retirement, you still have time and resources to boost your savings while you’re still working. Here are some strategies to help you reach your retirement goals, even with a shorter time horizon:

Income Optimization Techniques

Increasing your income before retirement can make a significant difference in your savings. Taking full advantage of catch-up contributions and picking up part-time work or a side hustle are just a couple of ways you can boost your income.

You can also delay Social Security, because every year Social Security is delayed past full retirement age (FRA) increases your benefits by 8% annually until age 70.

Expense Reduction Strategies

Decreasing your expenses can help you free up cash flow and put more money toward your retirement accounts.

You might consider downsizing your home, moving to a more affordable city, or cutting unnecessary costs to make the most of your income now. 

Debt Management Approaches

Paying off debt is an excellent way to cut costs before you retire.

Focus on high-interest debt first– like credit cards and personal loans – to reduce interest costs. Then, consider refinancing your mortgage for lower rates, or making additional payments to pay your house off quicker. 

Do your best to avoid taking on any new debt, and limit large purchases when you can. 

Investment Allocation Considerations

The closer you get to retirement, the more important it is to keep an eye on your investment mix. Portfolio adjustments can balance growth with risk management.

Reducing your exposure to high-volatility stocks can help you maintain your money, but keeping some equities still allows your portfolio to grow over time.

Many soon-to-be retirees also increase bonds and dividends in their portfolio, because they provide more stability than stocks.

Don’t forget to have some liquidity in the form of an emergency fund or short-term cash reserves. Access to cash can help you avoid withdrawing from investments during market downturns.

Advanced Catch-Up Strategies

More advanced catch-up strategies can help you supercharge your retirement savings. Here are some approaches to help late-career savers build wealth efficiently.

Backdoor Roth IRA Considerations

High-income earners who exceed the income limits for a Roth IRA ($150,000 for single filers, $236,000 for married filing jointly in 2025) can still take advantage of tax-free growth with a Backdoor Roth IRA.

A Backdoor Roth IRA works by first contributing to a Traditional IRA, and then converting the funds to a Roth IRA. This allows for tax-free growth and withdrawals in retirement.

There are some stipulations to think about with this strategy.

First, if you already have pre-tax IRAs, part of your conversion can be taxed. This is called the pro rata rule. 

There is also a 5-year rule, which states that converted funds must remain in the Roth for five years before you can make penalty-free withdrawals.

After-Tax Contributions

Some 401(k) plans allow after-tax contributions beyond the standard limit. These contributions can later be rolled into a Roth IRA via a strategy known as the Mega Backdoor Roth.

This allows for higher Roth contributions of up to $70,000 in 2025, or $77,500 for those 50 and older, and $81,250 for anyone aged 60-63.

Self-Employed Retirement Options

If you are self-employed, there are some retirement savings options that allow for higher contribution limits and tax advantages:

Solo 401(k): Allows employee contributions ($23,500 + $7,500 catch-up) plus employer contributions.

SEP IRA: Allows for contributions of up to 25% of compensation or $70,000. (Note that SEP IRAs do not allow catch-up contributions.)

Defined Benefit Plan: A personal pension plan for high-income earners, allowing up to $280,000 (in 2025) in contributions based on income and retirement goals.

Real Estate and Alternative Investments

Real estate investments can help you diversify your portfolio and potentially earn more passive income. Owning and renting out properties can provide cash flow and long-term appreciation,while Real Estate Investment Trusts (REITs) can provide high dividends and long-term capital appreciation. 

Implementation and Monitoring

It can be overwhelming to keep track of your catch-up contributions, but with a little planning, you can maximize your savings over 50.

A catch-up contribution schedule can help you stay on top of goals, payments and deadlines, while tracking your progress can show you what’s working, and where you might need to adjust your strategy.

Review and rebalance your portfolio on a regular basis, especially as you get closer to retirement.

If you need more assistance, reach out to a financial professional who can guide you in your retirement savings goals.

Boosting Retirement Savings Over 50

Catch-up contributions are a key strategy in making the most of your retirement savings, especially as you near retirement age. By taking advantage of these opportunities, you can give yourself a financial edge as you begin your retirement journey.