5 jobs that still offer a pension
With the sudden emergence of the 401k and other investment-based plans, pensions have become less popular throughout every sector.
unbranded – Lifestyle
- Someone in Generation X who is 59 in July but turns 60 in September 2025 could contribute up to the maximum of $34,750 in a 401(k) plan in 2025.
- The maximum contribution to a 401(k) plan that any employee can make — not including matching contributions from an employer — is $23,500 in 2025.
Many people edging closer to traditional retirement age might not realize it, but they’re allowed to set aside thousands of dollars more in savings in their 401(k) plans this year — if they’re the right age.
Beginning in 2025, we’re talking about substantially higher “catch-up” contribution in 401(k) plans that applies to savers who turn age 60, 61, 62 and 63 during the calendar year.
The youngest of baby boomers — and the oldest Gen Xers — who want to save more for retirement can do so in a 401(k) to defer the income taxes they’d pay on their contributions and earnings from investments until retirement.
For example, someone in Generation X who is 59 in July but turns 60 in September 2025 could contribute up to the maximum of $34,750 in a 401(k) plan in 2025.
Here’s the breakdown:
- We start with a $23,500 limit for everyone. The maximum contribution to a 401(k) plan that an employee can make — not including matching contributions from an employer — is $23,500 in 2025. That’s up from $23,000 for 2024. The limit applies to 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan
- We add a potential annual catch-up contribution of $7,500 for those employees age 50 and over in 2025. That limit applies generally to those who participate in most 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan, according to the Internal Revenue Service.
- An extra $3,750 can be saved in 401(k) plans by employees age 60, 61, 62 and 63. The higher catch-up limit ends up at $11,250 instead of $7,500 for employees in their early 60s.
Significant revisions that allow the extra retirement savings were packed into SECURE 2.0, which was signed into law by President Joe Biden in late 2022.
One quirk will apply starting in 2026 to reduce the tax break for very high wage earners.
Beginning next year, all catch-up contributions made by those age 50 and older will need to be made into a Roth account in after-tax dollars if you earn more than $145,000 in the prior calendar year. Those employees earning $145,000 or less, adjusted for inflation going forward, will be exempt from the Roth requirement.
Experts say the vast majority of 401(k) plans already have a Roth option. Among Fidelity managed plans, for example, 94.4% currently offer a Roth option, according to Kirsten Hunter Peterson, vice president of workplace thought leadership at Fidelity Investments.
Those few plans that do not will need to add a Roth option by 2026 to accommodate higher-wage earners in this situation.
So, how many people in their early 60s are goosing up their savings so far?
Mike Shamrell, vice president of workplace thought leadership at Fidelity Investments, said the most recent data indicates that around 10% of those who qualify appear to be aware of the change and are aiming to save the new maximum that applies to those 60 through 63 in 2025.
Shamrell indicates that it is early in the year so the numbers potentially could change going forward.
Someone who wants to save more to reach the allowed maximum will need to do the math.
Christine Benz, author of “How to Retire: 20 Lessons for a Happy, Successful, and Wealthy Retirement,” said people can simply check their 401(k) provider’s website to see their contributions so far this year.
“Are you on track to contribute the maximum allowable amount at your current savings rate?” she said.
Someone who wants to save more to reach the allowed maximum will need to do the math.
Take a worker who is 61 in 2025 and making traditional pretax contributions into a 401(k) plan. If paid every two weeks, the employee would need to contribute $1,336.54 each paycheck to hit a $34,750 max in 2025.
Someone who has only put in $15,000 so far would still need to add a bit less than $20,000 before year end to hit that $34,750 limit. If the employee has 12 pay periods remaining, for example, contributions would need to be $1,646 per paycheck in the second half of the year to hit the limit.
Benz suggests that savers can run some numbers via an online calculator, such as one at author and podcast host Clark Howard’s website. See to figure out what it takes to max out your 401(k) contributions. Results can update as you play with the numbers you input.
Benz, director of personal finance and retirement planning for Chicago-based Morningstar, acknowledged that many people would have to take some serious steps to start saving substantially more money in a 401(k) from June through December to hit the maximum.
Maybe you take your entire raise and dedicate it to retirement savings. Maybe you would also need to cut costs.
Benz said consumers might need to consider trimming subscriptions, reducing the frequency of dining out, and exploring less expensive travel such as camping, road trips, or “stay-cations.”
Granted, if you’re making $100,000 a year, you’re looking at trying to save 34.75% of your pay to hit $34,750 in retirement savings.
“For people in their early 60s looking to take advantage of the new super-catch-up contributions, the good news is that life stage is often a high-earning, “empty nest” phase,” she said.
For some, saving more money could be more manageable than it was when they were paying for day care, school clothes, dance lessons, travel hockey, college tuition, and more when their children were younger.
Contact personal finance columnist Susan Tompor: stompor@freepress.com. Follow her on X @tompor.
That’s a great point about balancing risk & reward! I’ve been checking out platforms like JL Boss recently, and their variety of jlboss slot games is impressive. Convenient access via the app is a huge plus too! Definitely adds to the fun. 😉