One could say that there are only two key milestones in retirement planning: the day you begin participating in a retirement savings account and the day you begin drawing money from it. But, of course, there are others as well.

One is the day you turn 50 years old. Why? Because those age 50 or older on December 31 of any given year can start making “catch-up” contributions to their employer-sponsored retirement plans by that date. These are additional contributions to certain retirement accounts beyond the regular annual limits.

Maybe you haven’t yet saved as much for retirement as you’d like to. Or perhaps you’d just like to make the most of tax-advantaged savings opportunities. Whatever the case may be, let’s get caught up with the latest catch-up contribution amounts.

401(k)s and SIMPLEs

Under 2025 limits for 401(k)s, if you’re age 50 or older, after you’ve reached the $23,500 maximum limit for all employees, you can contribute an extra $7,500, for a total of $31,000. If your employer offers a Savings Incentive Match Plan for Employees (SIMPLE) instead, your regular contribution maxes out at $16,500 in 2025. If you’re 50 or older, you’re allowed to contribute an additional $3,500 — or $20,000 in total for the year.

But check with your employer because, while most 401(k) plans and SIMPLEs offer catch-up contributions, not all do.

Self-Employed Plans

If you’re self-employed, retirement plans such as an individual 401(k) — or solo 401(k) — also allow catch-up contributions. A solo 401(k) is a plan for those with no other employees. You can defer 100% of your self-employment income or compensation, up to the regular yearly deferral limit of $23,500, plus a $7,500 catch-up contribution in 2025. But that’s just the employee salary deferral portion of the contribution.

You can also make an “employer” contribution of up to 20% of self-employment income or 25% of compensation.

IRAs, Too

Catch-up contributions to a traditional (non-Roth) account can not only enlarge your retirement nest egg but also may reduce your 2025 tax liability. Additionally, keep in mind that catch-up contributions are available for IRAs, too, but the deadline for 2025 contributions is April 15, 2026. The amount you can contribute to a traditional or Roth IRA in 2025 is $7,000 with a $1,000 catch-up contribution.

If you have any questions about catch-up contributions or other retirement saving strategies, contact your Hoberman & Lesser tax advisor.