Over Age 50? Catch Up on Retirement!

Over Age 50? Catch Up on Retirement!

July 08, 2023

The years between turning 50 and retirement can be some of the very best.Hopefully you’ve earned enough to start living comfortably, you’re happy and secure in your job and life, and you know which risks are worth taking. Did you know...Julia Child didn’t begin her iconic cooking show until she was 51, and Ray Croc launched the global franchise McDonalds at 52!

Even the federal government knows that this period of life is special. According to the IRS, 50 is the magical age when you get to start contributing thousands of dollars more to your retirement account each year, commonly called “catch up contributions.”  

Under current regulations, individuals who are age 50 or over at the end of the calendar year can make annual catch-up contributions. Catch-up contributions up to $7,500 in 2023 may be permitted by these plans: 401(k) (other than a SIMPLE 401(k)), 403(b), SARSEP, governmental 457(b). Elective deferrals are not treated as catch-up contributions until they exceed the limit of $22,500 in 2023 ($20,500 in 2022) or the ADP test limit of section 401(k)(3) or the plan limit (if any). Be sure to visit the IRS website for the most current limits.

That's a lot of verbiage so please reach out to me if you'd like clarification in simple terms. 

This special perk is a real gift to investors looking to boost their savings, and even if your birthday doesn’t come until the very end of the year you can still take advantage. It’s a fast, simple way to ease into those golden retirement years with extra resources, and it takes nothing but knowledge and discipline. If you want to build making catch up contributions into your retirement planning, let’s connect. Call me at (804) 665-1589 or e-mail me at kmurphy@capfs.com.