A:

Catch-up contributions can only be made to plans with salary deferral features.

If you want to make catch-up contributions, you will need to amend your profit-sharing plan to include a salary deferral feature if it does not already have one. Most profit-sharing documentation includes a check-box option for adding a salary deferral/401(k) feature to the plan. Check yours to see whether you have already made that election. If you did not, the deadline for making this change will be December 31 each year for calendar year plans.

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

This question was answered by Denise Appleby
(
Contact Denise)

RELATED FAQS
  1. Where can I find information on multiple annual additions for someone employed by ...

    That information can be found in Internal Revenue Code Section 402(g). Also see IRS Publication 571.If an individual participates ... 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. Can you have a 403(b) and also contribute to a 401(k)?

    Yes. You may participate in both a 403(b) and a 401(k) plan. However, certain restrictions may apply to the amount you can ... Read Answer >>
  4. Are catch-up contributions included in the 415 limit?

    Learn about IRC section 415 limit and why catch-up contributions are not included. Learn about current 401(k) contribution ... Read Answer >>
  5. 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 >>
Related Articles
  1. 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.
  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. Retirement

    Common Questions About Retirement Plans

    We offer some solutions for the individual taxpayer as well as the small business owner.
  4. Small Business

    Plans The Small-Business Owner Can Establish

    Don't hesitate to adopt a smart plan for you and your employees.
  5. Retirement

    401(k) Plans For The Small Business Owner

    If you own a business, this may be the plan for you! Find out about its benefits and eligibility requirements.
  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

    6 Retirement Savings Tips For 45- To 54-Year-Olds

    Now is the time to kick savings into high gear. Find out how.
  8. 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. Profit-Sharing Plan

    A plan that gives employees a share in the profits of the company. ...
  2. Catch-Up Contribution

    A type of retirement savings contribution that allows people ...
  3. Matching Contribution

    A type of contribution an employer chooses to make to his or ...
  4. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt ...
  5. After-Tax Contribution

    A contribution made to any designated retirement or any other ...
  6. Savings Incentive Match Plan For Employees Of Small Employers - SIMPLE

    A retirement plan that may be established by employers, including ...
Hot Definitions
  1. Expense Ratio

    A measure of what it costs an investment company to operate a mutual fund. An expense ratio is determined through an annual ...
  2. Pro Forma

    A Latin term meaning "for the sake of form". In the investing world, it describes a method of calculating financial results ...
  3. Trumpcare

    The American Health Care Act, also known as Trumpcare and Ryancare, is the Republican proposal to replace Obamacare.
  4. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
  5. Portable Alpha

    A strategy in which portfolio managers separate alpha from beta by investing in securities that differ from the market index ...
  6. Run Rate

    1. How the financial performance of a company would look if you were to extrapolate current results out over a certain period ...
Trading Center