Catch-Up Contributions
If you are 50 or older, you may be able to make additional contributions to your employer-sponsored retirement plan or IRA - above the regular limits.
401(k), 403(b), and 457 plans
- The maximum catch-up contribution is $3,000 in 2004, increased by $1,000 each year thereafter to $5,000 in 2006.
SIMPLE plans
- The maximum catch-up contribution is $1,500 in 2004, increased by $500 each year thereafter to $2,500 in 2006.
IRAs
- The maximum catch-up contribution is $500 from 2002 to 2005, and $1,000 beginning in 2006.
What the changes mean for you
If you didn't or couldn't start saving for retirement early enough, this is a great opportunity to catch up. Please note you can only participate in catch-up contributions if no other elective deferrals can be made because you have reached other allowable limits.
Please contact your employer to see if this option is available to you.
