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. Do I need to hit my 401(k) contribution limit before I can begin making catch-up ...

    You generally need to reach the limit established by the plan in order to make catch-up contributions; therefore, if the ... Read Answer >>
  2. 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 >>
  3. 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 >>
  4. 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 >>
  5. 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 >>
Related Articles
  1. Retirement

    New Retirement Plan Limits for 2016

    Here's what the limits look like for 2016, compared to 2015 (the taxes you'll file in April).
  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

    Common Questions About Retirement Plans

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

    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.
  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. 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.
  9. 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. Profit-Sharing Plan

    A plan that gives employees a share in the profits of the company. ...
  3. 401(k) Plan

    A qualified plan established by employers to which eligible employees ...
  4. Matching Contribution

    A type of contribution an employer chooses to make to his or ...
  5. Cash Or Deferred Arrangement - CODA

    The method of funding any type of qualified profit-sharing or ...
  6. Nonelective Contribution

    A type of contribution an employer chooses to make to each of ...
Hot Definitions
  1. Debt Security

    Any debt instrument that can be bought or sold between two parties and has basic terms defined, such as notional amount (amount ...
  2. Taxable Income

    Taxable income is described as gross income or adjusted gross income minus any deductions, exemptions or other adjustments ...
  3. Chartered Financial Analyst - CFA

    A professional designation given by the CFA Institute (formerly AIMR) that measures the competence and integrity of financial ...
  4. Initial Coin Offering (ICO)

    An Initial Coin Offering (ICO) is an unregulated means by which funds are raised for a new cryptocurrency venture.
  5. The Bernie Madoff Story

    Bernie Madoff ran a multibillion-dollar Ponzi scheme that is considered the largest financial fraud of all time.
  6. Pyramid Scheme

    An illegal investment scam based on a hierarchical setup. New recruits make up the base of the pyramid and provide the funding, ...
Trading Center