What is the age requirement for making catch-up contributions?

You must be age 50 or older by the end of the calendar year to make catch-up contributions to most retirement accounts like 401(k)s and IRAs. For Health Savings Accounts (HSAs), the catch-up contribution begins at age 55.

Can I make catch-up contributions to both my 401(k) and my IRA?

Yes, if you meet the age requirement, you can make catch-up contributions to both your employer-sponsored plan (like a 401(k)) and your Individual Retirement Account (IRA). The catch-up limits for each type of account are separate and independent.

Do employer contributions count towards my personal catch-up limit?

No, employer contributions (such as matching contributions or profit-sharing) do not count towards your personal catch-up contribution limit. The catch-up limit applies only to your own elective deferrals or contributions.

Are catch-up contributions tax-deductible?

It depends on the type of account. Catch-up contributions to a Traditional 401(k) or Traditional IRA are generally tax-deductible, reducing your current taxable income. Catch-up contributions to a Roth 401(k) or Roth IRA are made with after-tax dollars and are not tax-deductible, but qualified withdrawals in retirement are tax-free.

What happens if I turn 50 mid-year?

If you turn 50 at any point during the calendar year, even on December 31st, you are eligible to make catch-up contributions for that entire year. The IRS considers your age as of the end of the year.

Can I contribute to a Roth IRA if my income is too high, even with catch-up contributions?

If your income exceeds the IRS limits for direct Roth IRA contributions, you cannot directly contribute to a Roth IRA, even with the catch-up provision. However, you may still be able to use the backdoor Roth IRA strategy, which involves contributing to a Traditional IRA and then converting it to a Roth IRA.

What is the deadline to make catch-up contributions for a given year?

For employer-sponsored plans like 401(k)s, contributions are typically made through payroll deductions and must be completed by December 31st of the contribution year. For IRAs, you have until the tax filing deadline of the following year (typically April 15th) to make contributions for the previous tax year.

Catch-Up Contributions: Boost Retirement Savings Over 50 |…