PG&E 401(k) Catch-Up Contributions: A Powerful Tool for Employees Over 50

If you’re a PG&E employee in your 50s, you’re probably already putting money into the Retirement Savings Plan (PG&E’s 401(k)). But here’s something a lot of people miss: once you hit age 50, you can put in extra, above the usual IRS limit. They’re called catch-up contributions, and if you’re over 50, they’re one of the simplest ways to stack more retirement dollars before the finish line.

Let’s walk through how they work, what the limits are, and how PG&E employees, both union and management, can take full advantage.

What Are Catch-Up Contributions?

Once you reach age 50, the IRS gives you permission to save more into your 401(k) than younger workers. These extra contributions are called “catch-up contributions” because they’re designed to help you, well… catch up.

You can contribute these funds on top of your regular pre-tax or after-tax contributions, giving you a higher annual savings limit and potentially reducing your current taxable income.

How Much Can You Contribute?

For 2024, the regular 401(k) contribution limit is $23,000. But if you're age 50 or older, you can contribute an additional $7,500, for a total of $30,500 in employee contributions.

The limits are set by the IRS and are adjusted for inflation every year:

Contribution TypeLimit (2024)Regular 401(k)$23,000Catch-Up (Age 50+)$7,500Total Possible$30,500

In addition, PG&E makes matching contributions based on your pension type and covered compensation, but more on that in a minute.

Who's Eligible?

It’s simple: If you turn 50 at any point in the calendar year, you qualify. You don’t have to wait until your actual birthday to start contributing more.

Union employees can contribute up to 20% of their covered compensation in catch-up contributions. Management employees can go even higher, up to 50% of their compensation covered.

Three Rules You Must Follow

Not everyone who turns 50 automatically gets to make catch-up contributions. You must hit one of the following limits first:

• IRS regular 401(k) contribution limit (currently $23,000)
• Annual additions limit, which includes employer match (currently $70,000 in 2025)
• Plan percentage cap, 20% for union or 50% for management

If you don’t hit one of those limits, your “catch-up” dollars are just treated as regular contributions.

Set your contributions high enough early in the year so you’re on pace to hit one of the limits by December 31. If you don’t hit a limit, those extra dollars won’t count as catch-up and may stop short of the full tax advantage.

Are Catch-Up Contributions Matched?

Unfortunately, no. PG&E does not match catch-up contributions. Their employer match only applies to your regular contributions up to the match-eligible percent, usually 6% for Final Pay pension, 8% for Cash Balance pension.

Still, catch-up dollars grow tax-deferred and can play a huge role in closing a retirement savings gap.

How to Start or Change Your Contributions

PG&E makes it easy to adjust your savings rate at any time. You can start, stop, or change your catch-up contributions by:

• Logging into www.401k.com
• Calling Fidelity’s RSP Service Center at 877-PGE-401K (877-743-4015)

Changes typically take effect within one or two pay periods.

Don’t forget you’ll need to re-elect your contribution rate each year. Contributions don’t automatically carry over unless you’ve set up a recurring election.

Example: How Much More Could You Save?

Let’s say you’re 55, earning $150,000, and you’ve been saving 10% into your 401(k).

Without catch-up, your contribution would be capped at $23,000. But by adding the $7,500 catch-up, you bump your total to $30,500.

Over the 10 years until the age of 65, here’s the difference:

ScenarioAnnual Contribution10-Year Total (No Growth)No Catch-Up$23,000$230,000With Catch-Up$30,500$305,000Extra Savings+ $7,500/year+ $75,000

Who doesn't want an extra $75,000 set aside for retirement, not counting a single dollar of market growth, provided you can afford to save the extra money each year.

Strategic Tips for PG&E Employees

How to make the most of the catch-up contributions:

1. Use the “Spillover” Option
   The Spillover election kicks in when you max out your pre-tax limit. It automatically shifts your contributions to after-tax, so your deductions keep going, and more importantly, so you don’t miss out on any employer match.
2. Coordinate with Your Pension and RMSA
   If you’re trying to max out PG&E retirement benefits, pension, RMSA, and RSP, make sure your strategy includes catch-up dollars. They may not be matched, but they help you reduce taxable income and increase retirement flexibility.
3. Start Early in the Year
   If you wait until Q3 or Q4, it can be tough to contribute enough in time to hit the IRS limits. Set up your payroll deductions early to spread out the savings pain.

FAQs

Q: Can I split my catch-up between pre-tax and after-tax?
A: No. PG&E only allows catch-up contributions on a pre-tax basis.

Q: Are catch-up contributions counted toward my $70,000 total limit?
A: No. They are in addition to that cap, making them a rare “bonus” savings opportunity.

Q: Will PG&E notify me when I qualify?
A: Not always. It’s your responsibility to make the election and ensure you're hitting the contribution thresholds that qualify your catch-up as “true” catch-up.

Final Thoughts

Catch-up contributions might not sound glamorous, but for PG&E employees over 50, they’re one of the best options you have available. If you’re looking to lower your tax bill, catch up on savings, or just build a bigger cushion for retirement, those extra dollars can go a long way. PG&E won’t match catch-up contributions, but they still grow tax-deferred, and over time. That can make a difference.

Let’s Talk Strategy

If you’re over 50 and want to make sure you’re maximizing your PG&E benefits, including your 401(k), pension, and RMSA, book a call with me.

We’ll go over:

• How much you should be contributing
• Whether catch-up is right for you
• How it fits into your pension and retirement timeline
• What to do if you’re behind on savings

Retirement might be around the corner, but there’s still time to catch up, and I’ll help you do it with confidence.