THE FATHER BLOG

Wait…am I off track on topics yet again? Tuesday is supposed to be some type of alcohol topic! Don’t worry my friends….today you will learn a little American History about this country in the early 1900s.

In the time between 1920 and 1933, alcohol was illegal here in the US due to Prohibition and the ratification of the 18th Amendment. The U.S. wanted Prohibition due to a combination of factors, including the belief that it would improve public morals and health, reduce crime, and solve social problems like domestic abuse and poverty. It was also driven by powerful lobbying groups like the Women’s Christian Temperance Union and the Anti-Saloon League, which were concerned about the destructive effects of alcohol on families and the workforce. Additionally, progressive reformers saw Prohibition as a way to impose greater control and order on society. 

Well…..that didn’t stop people from drinking. Tell people they can’t do something they enjoy and have been doing for years and they will find a way around it. They certainly did and that led to a surge in organized crime, smuggling, and corruption, as illegal alcohol production and distribution became highly profitable. It also resulted in unintended social changes, like the rise of speakeasies and a new sense of rebellion among women. 

Prohibition lasted about 14 years but ended with the ratification of the 21st Amendment to the Constitution on December 5, 1933, which repealed the 18th Amendment. This was largely a result of public opinion shifting due to the Great Depression, which made the economic benefits of ending the alcohol ban (like new jobs and tax revenue) more appealing than maintaining it. 

So there is a little history lesson for you. Want some good bar/pub trivia for your friends? Ask them which two states (of the 48 at the time) rejected the 18th Amendment. The answer to that question is Connecticut and Rhode Island. And some kudos go to my home state of New Jersey who fought in legislation for two years against the ratification of the 18th Amendment but ultimately ratified it in March of 1922.

What are we catching up on you ask? Your 401K…especially for older guys like me over 50…or you REALLY old guys between 60 and 63. Here is some things to think about:

For 2025, individuals age 50 and older can make an extra $7,500 in 401(k) catch-up contributions. A higher limit of $11,250 applies to those ages 60 through 63. These contributions are on top of the standard 2025 employee contribution limit of $23,500. 

Key Rules for 401(k) Catch-Up Contributions

• Eligibility: You must be age 50 or older by the end of the calendar year to be eligible for the standard catch-up contribution. Participants ages 60 through 63 are eligible for a higher “super” catch-up amount.
• Plan Permitted: The catch-up contribution feature must be expressly offered within your employer’s 401(k) plan document. Check with your plan administrator to confirm your plan allows them.
• Contribution Method: Catch-up contributions are made as additional elective deferrals, automatically “spilling over” once the regular annual limit is reached, or through a separate election, depending on your plan’s setup.
• Tax Treatment (2025): For 2025, you can generally choose to make catch-up contributions on either a pre-tax (traditional) or after-tax (Roth) basis, if your plan offers both options.
• Total Limits: The total amount you can contribute (regular plus catch-up) to a 401(k) in 2025 is:
  • Ages 50-59 (and age 64+): $23,500 (regular) + $7,500 (catch-up) = $31,000
  • Ages 60-63: $23,500 (regular) + $11,250 (catch-up) = $34,750
• Employer Contributions: Employer matching or profit-sharing contributions do not count against your personal elective deferral or catch-up limits. 

Coming Change for High Earners (Effective 2026)

Starting in 2026, participants who earned more than $145,000 in FICA wages in the preceding calendar year will be required to make their catch-up contributions on an after-tax Roth basis. If your employer’s plan does not offer a Roth option, high earners will not be permitted to make catch-up contributions at all. 

For the remainder of 2025, all eligible participants can still choose between pre-tax and Roth catch-up contributions, regardless of income, provided their plan allows for both. 

Quick answer to that topic: whenever you get a chance!

I’ve shared my theory on work/jobs in the past: They pay the bills and kill time between vacations. So the key is to always have something to look forward to in the near future. It keeps you moving forward in a more positive mindset. If there was nothing but work ahead of me, I’d go insane. So making sure you have a series of “gates” is very helpful. These “gates” could be something very simple like a weekend get together, a lunch date with a friend, attending a concert or sporting event. I believe I have my gates set up until the end of the year now.

Booked a trip to St. Thomas in a couple weeks on a whim. Then have a good friend coming the week of Thanksgiving for a visit, another week of vacation time (nothing set there yet plan-wise) in mid December, and then the Christmas holiday (which luckily my company shuts down for between Christmas and New Years). So there you have it…I’m pretty much set up until 2026.

Take control of your “Gates of Life” while you can as the last set you reach, though Pearly, will be the last set you go through. Happy Friday…now go have some fun!