Retirement catch up contributions allow people age 50 or more to make additional contributions above the standard limit.  In 2025, the standard limit is $23,500 you can contribute to your 401K. If you are 50 and older in 2025, you can contribute an additional $7,500. This is a total of $31,000. You can contribute any amount up to $7,500. Whether you are doing a traditional 401K pre-tax or a Roth 401K post-tax, the retirement contribution limits apply to both including the catch up contributions.

Catch up contributions help those who started retirement investing late to “catch up.” If you started investing in your retirement late this is an opportunity that the government is allowing you to take advantage of. Even those who invested early can still leverage catch up contributions as long as you meet the age requirement.

Let’s say you are doing the maximum contribution of $23,500 in a traditional 401K which is a pre-tax account and are doing catch up contributions of the full $7,500. The $7,500 will apply to your pre-tax account. If you are doing a post-tax account such as a Roth 401K, the $23,500 plus the $7,500 will go into your post-tax account. Keep in mind that your paycheck will be lower to reflect the additional contributions.

If you are doing this in your pre-tax retirement account, your taxable income would be lower. If you are doing it in your post-tax retirement account, it will grow tax free and will not be taxed when you withdraw it at an eligible time.

There are a number benefits for leveraging the retirement catch up contribution option when you reach the eligible age. Whether you started late in your retirement investing or not, the government is allowing an additional $7,500 for catch up contributions in 2025. If you are interested in following my journey and their journey, follow them on Instagram and email subscribe to get alerts of latest posts or follow me on Facebook, Instagram, and Pinterest.