The catch with 401(k) catch-up contributions

Employees aged 50 and over have had the option of making additional 401(k) pretax contributions, called catch-up contributions, for more than 20 years. SECURE 2.0 increases the catch-up contribution amount to the greater of $10,000 or 50% more than the regular catch-up amount in 2025 for individuals who have attained ages 60, 61, 62 and 63 before the end of 2025. This is not as straightforward as it appears.