Overcontribution

A A A

DEFINITION

Any contribution to a tax-deductible retirement savings plan exceeding the maximum allowed contribution for a given period as determined by the retirement plan's registrar. Overcontributions are subject to the retirement plan's regulations or laws. Overcontributions are usually subject to some form of monetary penalty, intentioned to reduce their occurrences.

INVESTOPEDIA EXPLAINS

In the United States, overcontributions to Roth IRAs are subject to penalty if they are beyond a prescribed annual maximum overcontribution. The Government of Canada's RRSP program is known for the penalties imposed on RRSP overcontributions. 


RELATED TERMS
  1. Roth IRA

    An individual retirement plan that bears many similarities to the traditional ...
  2. Registered Retirement Savings Plan ...

    A legal trust registered with the Canada Revenue Agency and used to save for ...
  3. Self-Directed RRSP

    A type of RRSP (Registered Retirement Savings Plan) whose owner determines the ...
  4. Registered Retirement Savings Plan ...

    Assets invested in an RRSP. RRSP contributions can be made at any time and for ...
  5. Notice Of Assessment - NOA

    An annual statement sent by revenue authorities to taxpayers detailing the amount ...
  6. Retirement Readiness

    The state and/or degree of being ready for retirement. Retirement readiness ...
  7. Leveraged Benefits

    The use – by a business owner or professional practitioner – of their company’s ...
  8. Peri-Retirement

    A term for the period of time leading up to actual retirement. Peri-retirement ...
  9. MyRA

    A new tax-advantaged retirement account that President Barack Obama introduced ...
  10. Provident Fund

    A compulsory, government-managed retirement savings scheme used in India, Hong ...
Related Articles
  1. I just learned that my 2004 and 2005 ...
    Retirement

    I just learned that my 2004 and 2005 ...

  2. Registered Retirement Savings Plans ...
    Taxes

    Registered Retirement Savings Plans ...

  3. Retirement Planning Basics
    Options & Futures

    Retirement Planning Basics

  4. Passing Boomers Will Leave A Big Economic ...
    Investing Basics

    Passing Boomers Will Leave A Big Economic ...

  5. Will I pay taxes on my Social Security ...
    Retirement

    Will I pay taxes on my Social Security ...

  6. Can I deduct my Individual Retirement ...
    Taxes

    Can I deduct my Individual Retirement ...

  7. Can I contribute to a Roth IRA and still ...
    Retirement

    Can I contribute to a Roth IRA and still ...

  8. At what age will I be eligible for the ...
    Retirement

    At what age will I be eligible for the ...

  9. Can I take money out of my Individual ...
    Retirement

    Can I take money out of my Individual ...

  10. Will Retirement Be Part of Your Retirement?
    Retirement

    Will Retirement Be Part of Your Retirement?

comments powered by Disqus
Hot Definitions
  1. XW

    A symbol used to signify that a security is trading ex-warrant. XW is one of many alphabetic qualifiers that act as a shorthand to tell investors key information about a specific security in a stock quote. These qualifiers should not be confused with ticker symbols, some of which, like qualifiers, are just one or two letters.
  2. Quanto Swap

    A swap with varying combinations of interest rate, currency and equity swap features, where payments are based on the movement of two different countries' interest rates. This is also referred to as a differential or "diff" swap.
  3. Genuine Progress Indicator - GPI

    A metric used to measure the economic growth of a country. It is often considered as a replacement to the more well known gross domestic product (GDP) economic indicator. The GPI indicator takes everything the GDP uses into account, but also adds other figures that represent the cost of the negative effects related to economic activity (such as the cost of crime, cost of ozone depletion and cost of resource depletion, among others).
  4. Accelerated Share Repurchase - ASR

    A specific method by which corporations can repurchase outstanding shares of their stock. The accelerated share repurchase (ASR) is usually accomplished by the corporation purchasing shares of its stock from an investment bank. The investment bank borrows the shares from clients or share lenders and sells them to the company.
  5. Microeconomic Pricing Model

    A model of the way prices are set within a market for a given good. According to this model, prices are set based on the balance of supply and demand in the market. In general, profit incentives are said to resemble an "invisible hand" that guides competing participants to an equilibrium price. The demand curve in this model is determined by consumers attempting to maximize their utility, given their budget.
  6. Centralized Market

    A financial market structure that consists of having all orders routed to one central exchange with no other competing market. The quoted prices of the various securities listed on the exchange represent the only price that is available to investors seeking to buy or sell the specific asset.
Trading Center