Catch-Up Contribution
Extra retirement contributions allowed at age 50+. 401k: additional $7,500/year. IRA: additional $1,000/year. Helps late savers close gap.
What You Need to Know
Catch-up contributions allow workers age 50+ to contribute beyond standard limits to retirement accounts. Helps those who started saving late or faced financial setbacks.
2024 catch-up limits:
- 401(k)/403(b)/457: $7,500 extra (total $30,500 vs $23,000 standard)
- IRA (Traditional/Roth): $1,000 extra (total $8,000 vs $7,000 standard)
- SIMPLE IRA: $3,500 extra (total $19,000 vs $15,500 standard)
Age 60-63 super catch-up (starting 2025): 401k gets $11,250 extra instead of $7,500 for 4 years only.
Financial impact: Maxing catch-up for 10 years (age 55-65):
- $7,500/year at 7% return = $110,000 extra retirement savings
- With employer match on base contribution = $125,000+
Catch-up contributions use same tax treatment as regular contributions. Traditional 401k catch-up = tax deduction today. Roth catch-up = tax-free growth forever.
Prioritize: Max employer match first, then catch-up contributions, then taxable investing.
Sources & References
This information is sourced from authoritative government and academic institutions:
- irs.gov
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-catch-up-contributions
Related Calculators & Tools
Put your knowledge into action with these interactive tools:
401(k) Match Maximizer
Calculate how much free money you're leaving on the table with your 401(k) employer match
Retirement Planning Suite
Complete retirement dashboard: analyze savings gap, model withdrawal strategies with Monte Carlo simulation, and optimize Social Security claiming