Closing the Retirement Savings Gap: Why 55–64-Year-Olds Must Maximize 401(k) Contributions Now

For Americans aged 55–64, the retirement savings gap remains a stark reality. In 2025, the median retirement savings for this age group stands at $185,000, while the average (mean) balance is $537,560. Yet, the "magic number" many Americans cite as necessary for a comfortable retirement-$1.26 million-far outpaces even the average savings, underscoring a critical shortfall according to research. This gap is not merely a statistical anomaly; it reflects the urgent need for strategic action. For those within five to 10 years of retirement, maximizing 401(k) contributions-particularly through catch-up and "super catch-up" provisions-has become a non-negotiable step toward financial security.

The Power of Catch-Up Contributions

Catch-up contributions, which allow individuals aged 50 and older to contribute an additional $7,500 annually to their 401(k) or IRA, are a foundational tool for closing this gap according to data. However, the SECURE 2.0 Act has introduced an even more potent mechanism: the "super catch-up." For those aged 60–63 in 2025, this provision permits an extra $11,250 in annual contributions, indexed separately from the standard catch-up, with a total potential deferral of $34,750 according to analysis.

These enhanced limits are designed to address the compressed time frame many near-retirees face, offering a lifeline to those who may have under-saved earlier in their careers.

The impact of these provisions is already evident. According to a report by the SPARK Institute, 73% of employers have adopted the super catch-up feature, reflecting its growing importance in retirement planning. This widespread implementation signals a shift in how both employers and employees view these contributions-not as optional perks but as essential tools for bridging the savings gap.

Navigating the SECURE 2.0 Landscape

While the super catch-up is a game-changer, its effectiveness depends on timely adoption. For example, a 60-year-old with five years until retirement who maxes out their super catch-up contributions could add $56,250 to their portfolio by age 65, assuming no employer match or investment growth according to modeling. This amount could significantly bolster retirement readiness, particularly for those with modest savings.

However, challenges remain. The IRS has delayed implementation of Roth treatment for high-income participants' catch-up contributions until after December 31, 2026. While this delay provides plan administrators time to adjust, it also highlights the complexity of integrating these provisions into existing retirement frameworks. For now, the focus should remain on leveraging the current rules to their fullest extent.

Strategic Considerations for Near-Retirees

For 55–64-year-olds, the key is to act decisively. Those aged 60–63 should prioritize the super catch-up, while those aged 55–59 should maximize standard catch-up contributions. Employers, too, play a role: 97.6% of plans are preparing for Roth-related requirements, indicating a broader industry commitment to supporting these strategies.

Investors should also consider their risk tolerance and time horizon. With retirement looming, aggressive asset allocation may no longer be appropriate. Instead, contributions should be paired with a rebalanced portfolio that prioritizes capital preservation and steady income streams.

Conclusion: A Call to Action

The retirement savings gap is not an insurmountable problem-but it demands immediate attention. For 55–64-year-olds, the window to close this gap is rapidly closing. By maximizing catch-up and super catch-up contributions, individuals can add hundreds of thousands of dollars to their retirement portfolios in a short time. As the SPARK Institute notes, operational challenges and regulatory delays are inevitable, but the core message remains clear: act now, or risk leaving a significant portion of retirement security on the table.

The time to act is not tomorrow-it is today.