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All About Catch-Up Contributions


Catch-up contributions allow people age 50 or older to save more in their 401(k)s and individual retirement accounts (IRAs) than the usual annual contribution limits set by the IRS. The idea is to make up for the years you didn’t save enough, probably when you were young. The caps for catch-up contributions depend on the kind of retirement account you’re investing into.

Do you have questions about managing your retirement income plans? Talk with a financial advisor today.

Catch-Up Contribution Amounts and Limits

The IRS sets catch-up contributions for eligible retirement plans each year. Of course, you must first reach your plan’s contribution limit before you can make catch-up contributions. Below, we break down the 2023 individual contribution limits and catch-up contribution amounts for different plans.

  • IRAs: The contribution limit for Traditional IRAs and Roth IRAs is $6,500 in 2023 (and increases to $7,000 in 2024). The catch-up contribution is $1,000. So in total, you can make a contribution of $7,500 this year if you are 50 or older in 2023 (and $8,000 in 2024).
  • 401(k) and other workplace retirement plans: The annual contribution limit for workplace retirement plans like 401(k)s, 403(b)s, most 457s and the government’s Thrift Savings Plan (TSP) stands at $22,500 in 2023 (and $23,000 in 2024). The catch-up contribution amount for these plans is currently $7,500. So you can essentially contribute up to $30,000 in 2023 ($30,500 in 2024) if you are 50 or older.
  • SIMPLE 401(k): The contribution limit for SIMPLE retirement plan accounts is $15,500 in 2023 ($16,000 in 2024). The catch-up contribution amount is $3,500. So the total you can contribute is $19,000 in 2023 ($19,500 in 2024) if you are older than 50.

Regardless of what plan you’re investing in, you don’t have to wait until your 50th birthday to make catch-up contributions. You can begin doing so at any point during the calendar year you turn 50.

The Benefits of Catch-Up Contributions

SmartAsset: All About Catch-Up Contributions

As you can see, the catch-up contribution limit is quite generous across different plan types. You can use our 401(k) calculator to see how much you can expect to gain by taking advantage of catch-up contributions.

So let’s say you turned 50 years old this year and you reached your individual 401(k) limit but you don’t use your catch-up contribution. Assuming an annual return of 7% on your 401(k) investments, a reasonable estimate according to some advisors, your account would grow to $20,865 by next year.

But by taking the full catch-up contribution, it would grow to $27,820. If you do nothing more and let your money grow (at 7%) until you turn 66, you’re looking at a balance of more than $82,000.

Do you need help figuring out your required minimum distributions? Try SmartAsset’s RMD calculator to learn more.

In addition, you stand to gain even more if your company offers some type of employer match on your contributions. As noted above, the most you can contribute to your 401(k) if you’re at least 50 years old is $30,000 in 2023. The IRS calls this money that you put into the account “elective deferrals.” They are separate from any employer match your company may offer.

So in 2023, the total amount of tax-deferred contributions that can be made to your 401(k) plus all other defined contribution (DC) plans from all sources including your employer is $66,000 or $73,500 if you’re age 50 or older.

DC plans typically cover workplace retirement plans. So if you’re 50 or older, the most you can contribute in 2023 to all your IRAs, including any Roth options, is $7,500.

How to Make Catch-Up Contributions

To begin making these extra contributions, you’ll need to contact your plan administrator or access your account online. You can make this election at any time and change the amount you wish to contribute each pay period if necessary. Catch-up contributions must be made to 401(k) plans before the end of the year.

IRA catch-up contributions, on the other hand, can be made up until the deadline to file your income tax return. This date typically falls in the middle of April in the year following. So for 2023, you would have until April 15, 2024 to make contributions to your account.

Bottom Line

SmartAsset: All About Catch-Up Contributions

It’s best to take advantage of catch-up contributions and any other opportunities that can boost your retirement savings. You also want to avoid making investing mistakes that can jeopardize the money you’ve put away. As you get older, you’ll generally want to decrease your risk exposure. A financial advisor can help you make the tough switch from accumulating savings to drawing them down.

Tips on Saving for Retirement

  • Your nest egg will likely grow the most in the stock market. But to mitigate the risk, you’ll want to diversify your investments. If you’re not sure what the right allocation is for you, consult a financial advisor. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Increase your 401(k) contributions as soon as you get a raise. Ideally, you should defer the whole raise until you’ve reached the contribution cap. But any amount is better than nothing. If you do it right away, you won’t miss the added amount withheld from your paycheck.
  • Do your research to make sure you’re making the best retirement choice for your needs. Here’s a breakdown of IRAs vs. 401(k)s.

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