WHAT ARE CATCH-UP CONTRIBUTIONS?

If you are 50 or older, or you will reach age 50 by the end of the year, you may be able to make contributions to your IRA or employer-sponsored retirement plan above the normal contribution limit. Catch-up contributions are designed to help you make up any retirement savings shortfall by bumping up the amount you can save in the years leading up to retirement. Catch-up contributions can be made to traditional and Roth IRAs, as well as to 401(k) plans and certain other employer-sponsored retirement plans. But if you participate in an employer-sponsored retirement plan, check plan rules — not all plans allow catch-up contributions.

 

How much can you contribute as a catch-up contribution? It depends on the type of retirement plan you have and the tax year for which you are making the contribution.

 

401(k), 403(b), governmental 457(b) plans:*

 

  • $20,500 regular annual contribution limit and $6,500 catch-up contribution limit in 2022

SIMPLE plans:

 

  • $14,000 regular annual contribution limit and $3,000 catch-up contribution limit in 2022

Traditional and Roth IRAs:

 

  • $6,000 regular annual contribution limit and $1,000 catch-up contribution limit in 2022

*403(b) and 457(b) plans also have special catch-up rules that may apply.

 

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

The information provided is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you consult with a qualified tax or legal professional.

LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.