A:

You generally need to reach the limit established by the plan in order to make catch-up contributions; therefore, if the plan limit is $15,500, you will be able to make catch-up contributions only after you have reached that limit, assuming you will be at least 50 years old by year-end.

If the plan has a limit on your salary deferral contributions to 10% of your compensation and your compensation is $100,000, you would be eligible to make catch-up contributions after having reached the $10,000 limit.

However, it is important to note that qualified plans are not required to permit catch-up contributions, so the plan administrator or the summary plan description should be consulted to determine whether making catch-up contributions is even an option for you.

For more insight, see Retirement Savings Tips For 45- To 54-Year-Olds.

This question was answered by Denise Appleby
(
Contact Denise)

RELATED FAQS
  1. Who can make catch-up contributions?

    Learn when you become eligible for catch-up contributions to your IRA or your company's retirement plan, and find out about ... Read Answer >>
  2. What is the catch-up contribution limit for qualified deferred tax plans?

    Learn about statutory limits established by the U.S. Internal Revenue Service for catch-up contributions to deferred retirement ... Read Answer >>
  3. When can catch-up contributions start?

    Learn when you can start making catch-up contributions to qualified retirement plans such as 401(k)s, 403(b)s, SIMPLE 401(k)s ... Read Answer >>
  4. Can catch-up contributions be matched?

    Learn about how the specific terms of your retirement savings plan dictate how and when your employer may match your catch-up ... Read Answer >>
  5. Are catch-up contributions tax deductible?

    Learn the federal tax rules for contributions to 401(k), 403(b), SIMPLE 401(k) and IRA retirement plans before and after ... Read Answer >>
  6. How old do I have to be to make catch-up contributions?

    Learn about the rules and limitations for catch-up contributions for common retirement plans, such as 401(k), 403(b), IRAs ... Read Answer >>
Related Articles
  1. Financial Advisor

    The Deadline for Catch-Up Contributions: April 18

    Those who want to maximize their retirement plan contributions can still make a prior-year contribution for 2015. Don't miss the April 18th deadline.
  2. Retirement

    5 Reasons You Should Take Advantage of 401(k) Catch-ups

    Most Americans don't have a enough saved for retirement, but when they turn 50, they have a second chance thanks to the 401(k) catch-up provision.
  3. Financial Advisor

    457 Plan Contribution Limits in 2016

    Learn about the 2016 contribution limits for 457(b) retirement plans and how you may be eligible to make catch-up contributions up to twice the annual limit.
  4. Retirement

    401(k) Contribution Limits in 2016

    Find out what the contribution limits are for 401(k) retirement savings plans in 2016, including individual, employer and aggregate limits.
  5. Retirement

    How to Save More for Your Retirement

    Be sure you know all the tax-advantaged ways in which you can save more for retirement.
  6. Retirement

    Why are 401(k) contributions limited?

    Find out why contributions to 401(k) retirement plans are limited, including what the current contribution limits are and how limits encourage participation.
  7. Retirement

    It’s Never Too Late to Contribute to Your 401(k)

    Find out why it is never the wrong time to start contributing to a 401(k), even in your late 30s, 40s or 50s; discover how to maximize your savings at any age.
  8. Investing

    No 401(k) Boost in 2017 – Again

    We didn’t get a raise in 401(k) contributions in 2015 or 2016. Now it’s happened again. Why?
  9. Retirement

    How Much Can You Contribute to Your 401(k)?

    Given the fairly high compensation limits on these retirement plans, most workers can pitch in more than they currently do.
  10. Financial Advisor

    Retirement Planning for the Self-Employed

    How to select a qualified retirement plan if you are self-employed and have no employees.
RELATED TERMS
  1. Catch-Up Contribution

    A type of retirement savings contribution that allows people ...
  2. Annual Addition

    The total dollar amount contributed in a given year to a participant's ...
  3. Tax-Sheltered Annuity

    A type of annuity that allows an employee to make contributions ...
  4. IRA Plan

    A plan that individuals may establish to arrange and plan for ...
  5. Retirement Contribution

    A monetary contribution to a retirement plan. Retirement contributions ...
  6. Matching Contribution

    A type of contribution an employer chooses to make to his or ...
Hot Definitions
  1. North American Free Trade Agreement - NAFTA

    A regulation implemented on Jan. 1, 1994, that decreased and eventually eliminated tariffs to encourage economic activity ...
  2. Benchmark

    A standard against which the performance of a security, mutual fund or investment manager can be measured.
  3. Mobile Wallet

    Mobile wallet is a virtual wallet that stores payment card information on a mobile device.
  4. Leverage

    1. The use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment. ...
  5. Trumponomics

    Trumponomics is a term for the economic policies of President Donald Trump.
  6. Universal Health Care Coverage

    An organized healthcare system that provides healthcare benefits to all persons in a specified region. Many countries, such ...
Trading Center