You want to do all you can to stash away funds for retirement, and maximizing your contributions to retirement savings accounts after 50 is a great opportunity to do just that.

It’s not always easy or possible to save for retirement, especially in the early stages of adult life. People may be working toward paying down college loans and other debt or providing for family needs, and retirement feels a long way off. Others invest heavily in their business and neglect investing in their financial future as much as they should.

If you’re one of those people who thought when they were young that there was still plenty of time to save, but now you find yourself over 50 and wondering if your retirement plan is robust enough to support you through your post-working years, it’s time you maximize catch-up contributions.

Even if you’ve done all you can to save since Day 1 of your career, it’s quite likely that your income is much higher now than it was in those early days, theoretically providing you with a greater ability to save.

What are catch-up contributions?

These annual contributions to your retirement accounts (such as a 401(k), 403(b), or IRA) help you make up ground you may have forfeited earlier in life by not saving enough. They become an important consideration in financial planning for people aged 50 and older and allow you to save above and beyond the standard annual contribution limit.

They also come with tax advantages and increased tax efficiencies. Because these contributions are made pre-tax, you effectively reduce your current taxable income even more than you would by making the maximum standard contribution.

Note that your 401(k) plan or other retirement plan must include a catch-up provision, so be sure to check with your plan administrator to confirm they are allowed.

What are the contribution limits?

401(k) and 403(b) plans

The maximum annual employee contribution is $19,500 for 2021 ($58,000 Total Contribution), but if you’re 50 or older, you’re able to make an additional 401(k) catch-up contribution of up to $6,500, giving you a maximum annual employee contribution of $26,000 ($64,500 Total Contribution).

For 2022, the annual employee contribution limit for these accounts will be $20,500 ($61,000 Total Contribution)  while the catch-up contribution limit remains the same at $6,500, giving you a maximum employee contribution of $27,000 ($67,500 Total Contribution).

IRA & Roth IRA

Contribution limits for individual retirement accounts are $6,000, and the catch-up contribution for these accounts is $1,000. These amounts are the same for both 2021 and 2022.


The 2021 annual contribution limits for these plans is $13,500, plus you may add a catch-up contribution of $3,000.

Similar to the 401(k) and 403(b) plan limits, the catch-up contribution will remain the same for 2022, while the standard annual contribution limit will jump to $14,000.

Other types of accounts

There are a number of other retirement savings vehicles that allow you to make catch-up contributions. These include 457(b), thrift savings plan (TSP) and health savings accounts (HSA). HSAs require you to be 55 or older to make catch-up contributions.

Ready to make sure you’re maximizing your wealth and that ample retirement savings are part of your financial plan? Get in touch with us today.