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Catch-up contributions are designed to help people save extra money in tax-advantaged retirement accounts once they hit age 50. For many savers who are behind on their retirement savings goals, catch-up contributions represent a not-to-be-missed second chance at securing a more comfortable retirement.
A financial advisor can help you plan and save for retirement. Connect with a fiduciary advisor today.
But what if you've already amassed a sizable retirement nest egg? Say for example that you're 55 years old with $1.2 million in a 401(k). Making catch-up contributions may not be a necessity, especially if you have other immediate financial needs like covering your living expenses or paying down high-interest debt.
Catch-up contributions allow savers who are 50 and older make extra contributions to tax-advantaged retirement plans each year. These amounts adjust periodically. For 2024, an eligible saver can contribute an extra $7,500 to a 401(k), 403(b), 457 or government Thrift Savings Plan, bringing their total annual contribution to $30,500. The IRS also permits people 50 and older to save an extra $1,000 in an IRA.
Catch-up contributions are designed to help people save extra money in tax-advantaged retirement accounts once they hit age 50. For many savers who are behind on their retirement savings goals, catch-up contributions represent a not-to-be-missed second chance at securing a more comfortable retirement.
A financial advisor can help you plan and save for retirement. Connect with a fiduciary advisor today.
But what if you've already amassed a sizable retirement nest egg? Say for example that you're 55 years old with $1.2 million in a 401(k). Making catch-up contributions may not be a necessity, especially if you have other immediate financial needs like covering your living expenses or paying down high-interest debt.
Catch-up contributions allow savers who are 50 and older make extra contributions to tax-advantaged retirement plans each year. These amounts adjust periodically. For 2024, an eligible saver can contribute an extra $7,500 to a 401(k), 403(b), 457 or government Thrift Savings Plan, bringing their total annual contribution to $30,500. The IRS also permits people 50 and older to save an extra $1,000 in an IRA.
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