If a popular piece of retirement legislation makes it to President Biden’s desk this year, it would give older 401(k) participants the opportunity to contribute more to their nest egg and possibly bolster their tax-free savings.
Currently, anyone 50 or older may contribute an additional $6,500 on top of the annual $20,500 federal 401(k) contribution limit, for a total of $27,000 a year.
But under the Secure Act 2.0, which the House passed in March, the cap on catch-up contributions would increase to $10,000 for people ages 62, 63 and 64. So they’d be allowed to save a total of $30,500 in their 401(k)s.
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