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NOTE: This test film was created to test a number of real world scenarios with screenings. We'll be keeping this as a hidden test film for the long term.

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The term "catch-up contribution" can be a bit misleading in the context of a 401(k) because it implies that you're behind on savings and need to make up for lost time. The ability to make catch-up contributions to a 401(k) doesn't hinge on your account balance. The only thing that matters is your age. You can have a $7 million 401(k) at age 50 and still be allowed to make a catch-up contribution.

But the reality is that many people do get a late start on retirement savings, and by the time they reach the age of 50, they're not where they need to be. For people in that boat, catch-up contributions can be a lifeline.

In 2025, the rules of catch-up contributions in 401(k)s are also changing for the better for people between the ages of 60 to 63. If you're in that boat, your catch-up contribution will increase to $11,250 next year.

To be clear, that's not in addition to the standard $7,500 catch-up -- it's instead of $7,500. In other words, you can't contribute an additional $7,500 plus $11,250. Your total allowable 401(k) contribution for the year is $34,750. But as long as you reach age 60, 61, 62, or 63 during the 2025 calendar year, you can take advantage of this change and set yourself up with extra money to spend during your senior years.