9 Reasons Kimberly-Clark Employees Should Make 401(k) Catch-Up Contributions

Healthcare Provider Update: Healthcare Provider for Kimberly-Clark: Kimberly-Clark does not typically provide direct healthcare services as a core aspect of its business. However, it does offer healthcare products under its brand portfolio, which includes items like medical gloves and protective wear used in various healthcare settings. The company primarily focuses on consumer products in personal care and hygiene, and while it may collaborate with organizations in the healthcare sector, it is not a traditional healthcare provider. Potential Healthcare Cost Increases for Kimberly-Clark in 2026: As we approach 2026, Kimberly-Clark and its consumers may face significant increases in healthcare costs due to anticipated steep hikes in health insurance premiums. The Affordable Care Act (ACA) marketplace is expected to see rate increases exceeding 60% in certain regions, driven by factors such as rising medical costs and potential loss of enhanced federal premium subsidies. Without intervention, these escalating premiums could drastically affect affordability for millions, with some policyholders at risk of experiencing up to a 75% rise in out-of-pocket expenses. This perfect storm of rising costs could pressure both Kimberly-Clark's employees and consumers, impacting the overall demand for its healthcare-related products. Click here to learn more

For Kimberly-Clark employees approaching Retirement, catch-up contributions can help accelerate savings and reduce taxable income and are an important component of any financial plan, says Wesley Boudreaux, of The Retirement Group, a division of Wealth Enhancement Group.

'Kimberly-Clark employees should consider making catch-up contributions to increase their Retirement security - especially with the increasing age of retirees - and if done right it could provide immediate tax benefits and long-term financial stability,' says Patrick Ray, of The Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

1. The benefits and mechanics of catch-up contributions to retirement savings.

2. Key legislative changes regarding catch-up contributions under SECURE Act 2.0.

3. The psychological benefits of putting away money for retirement later in life.

For many Kimberly-Clark employees nearing retirement age or who have already started their journey toward retirement, catch-up payments are a necessary evil to increase retirement funds. This type of financial mechanism is useful for people who want to build up their retirement accounts because people over 50 can contribute more to employer-sponsored retirement plans like 403(b)s and 401(k)s.

Simple idea:

Make catch-up contributions. For 2024, the 401(k) contribution cap is $23,000. But the catch-up contribution option allows another $7,500, making the year's allowable contribution $30,500. Quite remarkable given that this is more than 25% of yearly income for those earning about $100,000, and the percentage rises for those with lower incomes.

The report 'How America Saves 2023' from Vanguard noted that virtually all employer-sponsored retirement plans allow participants to make catch-up contributions. Though widely available, only sixteen percent of participants used it in 2022 - a percentage that hasn't changed much since 2016. Notice that for those earning over $150,000 the utilization rate is 58%, which shows that income levels are related to catch-up contributions.

Catch-up payments are important for Kimberly-Clark employees beyond 401(k) programs. This is in addition to Individual Retirement Accounts (IRAs), which let contributors 50 and older add $1,000 over the regular limit - $7,000 for 2024. That's a calculated chance for Kimberly-Clark employees to grow their retirement savings - and it may mean restructuring their financial plan - rewriting budgets or delaying discretionary spending.

Catch-up contributions have many advantages. In addition to lowering taxable income, these contributions can be made before tax for immediate tax relief. This is good because the deferred taxes on these contributions will only apply when the money is withdrawn - which may be in a lower tax bracket in retirement. Moreover, compounding over fifty to sixty-five years can fill an individual's retirement account with a solid financial foundation for a twenty to 25-year retirement.

Like regular 401(k) deferrals, catch-up contributions are rolled into retirement savings programs as automatic paycheck deductions. They also allow allocations to Roth 401(k) plans, where retirement withdrawals are tax free. This flexibility is critical for Kimberly-Clark employees trying to top off their retirement resources or planning late retirement.

By the end of 2022, SECURE Act 2.0 changed catch-up contributions dramatically. For those earning over $145,000 a year, those extra after-tax payments will have to be made to a Roth account by 2026 for anyone making more than that. Originally this was to take place in 2024, but was postponed following an IRS notification in 2023. And from 2024 onward, catch-up restrictions on IRAs will be adjusted for inflation, perhaps rising 1% annually. Besides, from 2025 a special catch-up limit will apply to people 60 to 63 years old. That limit will be $10,000 or 150% of the regular catch-up limit.

To summarize, catch-up contributions are an essential strategy for Kimberly-Clark employees nearing or retiring to build up retirement savings. People are living longer so you need a solid financial foundation for your retirement years. Catch-up contributions help you accelerate your retirement savings while also providing tax benefits and increased security.

Research highlights psychological benefits of catch-up contributions to retirement savings aside from the obvious ones - for those who save later in life. People who are catching up on contributions had less anxiety about retirement and more financial confidence, according to a study in the Journal of Financial Planning (2021). This is important psychologically because it influences perceptions of financial security and may stimulate active savings. Such mental health is critical for people approaching retirement - and the benefits of catch-up payments go beyond quick cash rewards.

Start saving for retirement like you would in the spring. Like a gardener who uses catch-up techniques to ensure a crop when the best planting season has passed, older employees can use catch-up contributions to build a more lucrative retirement. Every dollar more you invest in your 401(k) or IRA is like planting late-season, fast-growing crops that can still produce fruit and take advantage of the remaining sunlight (working years). Like a well-tended garden that pays off early on, your financial garden will also produce plenty with tools like tax advantages, compounding interest, and provisions like those in SECURE Act 2.0.

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Sources: 

1. Internal Revenue Service.  'Retirement Topics - Catch-Up Contributions.'  IRS , 26 Feb. 2025,  www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-catch-up-contributions .

2. Fidelity Investments.  'How to Save Extra for Retirement with Catch-Up Contributions.'  Fidelity , Dec. 2024,  www.fidelity.com/viewpoints/retirement/catch-up-contributions .

3. Vanguard Group.  'How America Saves 2023.'  Vanguard , 2023,  www.vanguard.com/how-america-saves-2023 .

4. Voya Financial.  'New SECURE 2.0 'Super Catch-Up' Contribution for Ages 60-63.'  Voya , Dec. 2024,  www.voya.com/blog/new-secure-20-super-catch-contribution-ages-60-63 .

5. Investopedia.  'Catch-Up Contribution: What It Is, How It Works, Rules, and Limits.'  Investopedia , Sept. 2024,  www.investopedia.com/terms/c/catchupcontribution.asp .