A new retirement savings provision designed to help older workers build their nest eggs is falling flat with most Americans — not because they don't want to use it, but because they simply can't afford to.
Under the SECURE 2.0 Act passed in 2022, workers between ages 60 and 63 can contribute up to $34,750 annually to their 401(k) — combining the standard $23,500 limit, a $7,500 catch-up allowance for those over 50, and an additional $3,750 "super catch-up" that took effect in 2025. On paper, it's a meaningful opportunity. In practice, it's largely out of reach.
"Super catch-up contributions were poorly designed," said David Schneider, founder of Schneider Wealth Strategies. "Saving $34,750 is about half of what older households earn." He's right by the numbers: the median household income for Americans ages 60 to 64 was $83,770 in 2025, according to the U.S. Census Bureau.
Who's actually using it?
The data from major investment firms paints a modest picture. At Vanguard, among eligible workers in plans that offered the feature, just 21% hit the base $23,500 contribution limit — and only 9% maxed out at the full $34,750. Fidelity reported that roughly 11% of eligible workers made any super catch-up contributions at all, though nearly 70% of those who did contributed the maximum.
"I'm surprised the levels are that high, actually," said Kelly Gilbert, owner of EFG Financial. "Most people are only setting aside 6% in their retirement plans because that maximizes their employer match. Catch-ups don't come into play too often."
According to Vanguard's How America Saves 2025 report, the average worker contributed just 7.7% of their paycheck to a workplace retirement plan last year. Only 14% of participants reached the annual maximum.
A tool built for the few
The provision was designed with good intentions: Americans are living longer, retirement is getting more expensive, and the years just before leaving the workforce are a critical window for savings. The average American retires at 62, according to a 2024 MassMutual survey — squarely within the super catch-up eligibility window.
But critics argue the design is too narrow to matter for most people. The age bracket of 60 to 63 is tight, and some workers in that range are already drawing down their savings rather than adding to them. Awareness is also an issue.
"There has been very little information about it," said Miklos Ringbauer, founder of MiklosCPA. "Something brand new is always harder to implement. Now is when the real work begins."
One bright spot: at Vanguard, about a quarter of catch-up savers directed a portion of their contributions to a Roth account — a sign of growing interest in tax diversification heading into retirement. High earners making more than $150,000 annually are required to route catch-up contributions to a Roth, where money grows and can be withdrawn tax-free.
For workers who can afford it, the super catch-up is a genuine advantage. But financial advisers are quick to note that those workers rarely need the nudge — they're already saving aggressively. For everyone else, the provision barely registers.
"It's great to have, but it's of marginal benefit," Schneider said. "Those taking advantage of it were going to save money somehow, somewhere, anyway."