Americans 50 and older have long been allowed “catch-up contributions” to their 401(k) plans, IRAs and other retirement accounts. The reason is straightforward: as the runway to retirement gets shorter, Uncle Sam wanted to incentivize as much saving as possible.
But under the 2022 SECURE 2.0 Act, Congress allowed for additional “super” catch-up contributions for Americans aged 60 to 63.
Today, we’re going to cover how these enhanced super catch-ups work and the best ways to invest them in 2026.
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What is a super catch-up contribution?
All working Americans with access to an employer 401(k) or similar plan can contribute up to $24,500 in 2026 via tax-free salary deferrals. That’s a $1,000 increase over 2025 levels.
Of course, if you’re 50 or older, the limits get higher. You can contribute an additional $8,000, bringing the total to a whopping $32,500.
Under the SECURE 2.0 Act, these contribution levels get even more supersized. Employees aged 60, 61, 62 or 63 can chip in an additional $11,250, rather than the standard $8,000. That brings the total amount to $35,750. Contributions from employees older than 63 are capped at $32,500 ($24,500 plus the $8,000 catch-up).
Note that none of these figures include employer matching or profit sharing. Depending on the generosity of your employer, matching can add thousands or even tens of thousands of dollars in additional tax-deferred savings.
Also note that these limits only apply to employer plans such as 401(k) plans. There is no enhanced super catch-up for traditional IRAs or Roth IRAs. Workers 50 and older can contribute an additional $1,100, but there are no special rules for those aged 60 to 63.
There’s obviously no substitute for starting to save for retirement early and allowing compounding to work its magic. But regardless, the super catch-up contributions certainly allow Americans to turbocharge their retirement savings in what are often their peak earnings years.
How to invest your super catch-up contribution
Now for the fun part. You’ve managed to supersize your retirement contribution for the year. What’s the best way to invest it?
The answer to that question will depend on a couple of factors, including how close you are to meeting your retirement goals. If you’re not quite where you want to be, perhaps you still need aggressive growth. If you are near your retirement savings goal, you may be transitioning into income and distribution strategies.
You’ll also need to consider where your assets are located. In other words, how is your nest egg divided across tax-free retirement accounts and good, old-fashioned taxable brokerage accounts?
Let’s start with some basics, and then we can get more specific.
If you are in your early 60s and able to take advantage of the super catch-up contributions, you may still have decades left to live a quality life. But a reality check is needed here. It took you an entire working career to build your nest egg. If you were to take heavy losses in your portfolio at this stage of the game, you might not have time to make it back.
So, you want to make sure you’re not taking excessive risk.
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The old financial planning rule of thumb is that your stock exposure should be roughly 100 minus your age. Given that Americans are living longer today (and that returns on competing investments like bonds and cash are lower than they were in past decades), many financial planners have revised that rule to 120 minus your age. Using both as a range, a 63-year-old American should have roughly 37% to 57% in stocks.
Remember, these are rules of thumb, not iron-clad fundamental laws of the universe. You might be comfortable going higher than that, particularly if you have guaranteed income from a pension or if your portfolio is large and able to withstand a significant bear market. But for most savers, a little caution is likely warranted.
In other words, you should treat your additional catch-up contributions the way you treat the rest of your portfolio: investing them in a moderately aggressive portfolio primarily allocated to low-cost stock and bond index funds. A target-date fund that aligns with your age or expected retirement date would also be a perfectly reasonable option.
But let’s say your retirement planning is on track, your portfolio is appropriately allocated for your risk tolerance, and you don’t really “need” the super catch-up contributions to meet your goals. You’re viewing them as a bonus … something akin to “play money.”
In that case, have some fun with it. If your plan allows it, you could even consider buying individual stocks. Once your basic financial needs are met, it’s perfectly fine to get aggressive with a small portion of your portfolio, such as the super catch-up contributions.
Don’t forget about taxes
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We briefly touched on asset allocation earlier, and that is worth revisiting here. If you are like most savers, your nest egg is spread across a mixture of traditional retirement accounts, Roth accounts and taxable brokerage accounts.
Remember, not all investments are taxed the same. Stocks or stock funds held for the long term aren’t taxable until you sell them, and even then, they will generally benefit from lower long-term capital gains tax rates. Stocks paying qualified dividends also benefit from lower rates, whereas gains from short-term trading and interest tend to get taxed at higher rates.
Keep all of this in mind as you top up your 401(k) with the additional catch-up contributions. To the extent you can, try to put tax-inefficient investments such as bonds or actively-managed stock funds into your retirement account and save the tax-efficient investments, including stock index funds and qualified dividend stocks, for your taxable accounts.
