What types of plans allow catch-up contributions?

By Denise Appleby AAA
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. What are the best ways to plan for retirement?

    Learn the basic steps to creating a solid retirement plan that can support you and your family, and find out how to manage ...
  2. How can I consolidate my unsecured debt?

    Discover some of the different ways that you can combine your present unsecured debts into a consolidation loan -- even by ...
  3. How do Pay As You Go pension plans work?

    Learn how pay-as-you-go pension plans are different than fully funded pension plans and why some government plans are running ...
  4. Who is eligible for a Teacher Retirement?

    Learn about the retirement option, the Teacher Retirement System, offered to teachers and other public school employees, ...
RELATED TERMS
  1. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
  2. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...
  3. Leveraged Benefits

    The use – by a business owner or professional practitioner – ...
  4. Peri-Retirement

    A term for the period of time leading up to actual retirement. ...
  5. MyRA

    A new tax-advantaged retirement account that President Barack ...
  6. Target-Date Fund

    A mutual fund in the hybrid category that automatically resets ...
Related Articles
  1. Self-Employed? Top Plans For Retirement ...
    Retirement

    Self-Employed? Top Plans For Retirement ...

  2. Want To Know How To Save For Retirement? ...
    Retirement

    Want To Know How To Save For Retirement? ...

  3. 8 Essential Tips For Retirement Saving
    Investing Basics

    8 Essential Tips For Retirement Saving

  4. 'Donut Hole' Essentials For The Financial ...
    Investing Basics

    'Donut Hole' Essentials For The Financial ...

  5. Tips To Beat Inflation For Near-Retireees
    Investing News

    Tips To Beat Inflation For Near-Retireees

Trading Center