What are catch-up contributions?Submitted by Wealth Strategies Financial Group on August 19th, 2019
If you are 50 or older, or you will reach age 50 by the end of the year, you may be able to make contributions to your IRA or employer-sponsored retirement plan above the normal contribution limit. Catch-up contributions are designed to help you make up any retirement savings shortfall by bumping up the amount you can save in the years leading up to retirement. Catch-up contributions can be made to traditional and Roth IRAs, as well as to 401(k) plans and certain other employer-sponsored retirement plans. But if you participate in an employer-sponsored retirement plan, check plan rules — not all plans allow catch-up contributions.
How much can you contribute as a catch-up contribution? It depends on the type of retirement plan you have and the tax year for which you are making the contribution.
401(k), 403(b), governmental 457(b) plans:*
$19,000 regular annual contribution limit and $6,000 catch-up contribution limit in 2019
$13,000 regular annual contribution limit and $3,000 catch-up contribution limit in 2019
Traditional and Roth IRAs:
$6,000 regular annual contribution limit and $1,000 catch-up contribution limit in 2019
*403(b) and 457(b) plans also have special catch-up rules that may apply.
*This is a Forefield 3rd party article which is being submitted by Wealth Strategies Financial Group.
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