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401k Catch Up Contributions
If you are older than 50 years or will be 50
by the end of the tax year, then the IRS has a special provision allowing
you to contribute to your 401k above and beyond the typical dollar limits
set for your 401k plan. These contributions are called "401k catch up
contributions".
401k Catch up contributions for traditional
401k plans or safe harbor 401k plans:
According to the IRS, for the years 2007 and
2008 the maximum amount you can contribute to your safe harbor or
traditional 401k plan is $15,500. However, if you are 50 years old or
older, or you will be 50 during the current year then you are allowed to
defer an additional $5,000 from your salary into your company's 401k plan
provided your company's 401k plan allows for catch up contributions. Not
all 401k plans offer catch up contributions nor are they required by law
to do so.
401k Catch up contributions for SIMPLE 401k plans:
According to the IRS, for the years 2007 and 2008 the maximum amount you
can contribute to your SIMPLE 401k plan is $10,500. However, if you are
50 years old or older, or you will be 50 during the current year then
you are allowed to defer an additional $2,500 from your salary into your
SIMPLE 401k plan provided your SIMPLE 401k plan documents allow for
catch up contributions. Not all SIMPLE 401k plans offer catch up
contributions nor are they required by law to do so.
401k Catch up contributions for Roth 401k plans:
According to the IRS, for the years 2007 and 2008 the maximum amount you
can contribute to your Roth 401k plan is $15,500 subject to the 402(g)
limit. However, if you are 50 years old or older, or you will be 50
during the current year then you are allowed to defer an additional
$5,000 from your salary into your Roth 401k plan provided your SIMPLE
401k plan documents allow for catch up contributions. Not all 401k plans
offer catch up contributions nor are they required by law to do so.
What if your employer does not offer 401k catch up contributions?
In the event that your employer does not offer catch up contributions in
your traditional 401k plan then you may be eligible to defer the extra
catch up contribution amount if you work for more than one employer and
participate in 2 different 401k plans. So, if you are 50 years or older
then instead of having a maximum deferral amount of $15,500 for both
401k plans, you can actually defer the maximum limit of $15,500 plus the
extra $5,000 catch up contribution amount.
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provide general information about 401k and IRA retirement plans. Nothing on
this site should be considered legal, financial or tax advice. Please
consult your tax or financial advisor for professional advice. While
we strive to periodically update the information on this website,
CatchUp401k.com makes no representation or warranties as to the
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