Secure 2.0 Catch-up age 60,61,62,63

[WCC]

Hello,

I want to ask for your thoughts on Secure 2.0 Section 109 Higher Catch-up Limit To Apply At Age 60, 61, 62, and 63.

Am I understanding that at age 64+ the higher catch-up amount is no longer allowed? Seems like that is exactly what the wording says, but just seems odd. Is there a reason for only allowing a 4 year window? If you are age 64+ in 2025 then this has no impact on you? Or am I missing something? 

Thank you

[Gilmore]

I guess you get a boost in the deferral max for a few years leading up to the traditional 65 retirement age.

[EBECatty]

That seems to be the case. The concept seems similar to the special catch-up contribution limits for 457(b) plans where you get certain catch-up opportunities only for the three years before normal retirement age. 

[C. B. Zeller]

As you might be aware, these bills are "scored" in Congress with respect to their cost over a 10-year period. From the government's perspective, plan contributions are a cost because they reduce the amount of taxable income. Things like the Rothification of catch-up contributions are revenue raisers because they increase the amount of tax revenue, and offset the cost of the increased contributions.

I heard it explained once that if you're looking for any deeper meaning behind the various numbers or limits, you're going to be disappointed. What ends up in the law is just whatever scored well enough to fit within the budget of that particular bill. In this case, maybe they wanted to do 5 years of extended catch ups, but that would have been too costly, so they settled on 4. It's hard to know exactly how the sausage gets made unless you're inside the factory.

[RatherBeGolfing]

13 minutes ago, C. B. Zeller said:

What ends up in the law is just whatever scored well enough to fit within the budget of that particular bill. In this case, maybe they wanted to do 5 years of extended catch ups, but that would have been too costly, so they settled on 4. It's hard to know exactly how the sausage gets made unless you're inside the factory.

For S2.0 the provisions came from three different house and senate bills.  I believe the increased catch up was included in two out of three bills, but they used different years and different number of years.  The final provision was likely a combination of a compromise between house/senate bills and cost of the provision.

[shERPA]

Those who like sausage and respect the law should not watch either being made.