Overcontribution

DEFINITION of 'Overcontribution'

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.

BREAKING DOWN 'Overcontribution'

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. Registered Retirement Savings Plan ...

    Assets invested in an RRSP. RRSP contributions can be made at ...
  2. Retirement Contribution

    A monetary contribution to a retirement plan. Retirement contributions ...
  3. Pension Adjustment - PA

    The amount of contributions that can be made to a Registered ...
  4. Self-Directed RRSP

    A type of RRSP (Registered Retirement Savings Plan) whose owner ...
  5. Registered Retirement Savings Plan ...

    A legal trust registered with the Canada Revenue Agency and used ...
  6. Lifelong Learning Plan

    A provision applicable to the Canadian Registered Retirement ...
Related Articles
  1. Taxes

    RRSPs: Contributing - Part 1

    Contribution Limits Because of the tax benefits provided by RRSPs, the Canadian government has capped the amount of money that can be contributed. (Note: the contribution limit is sometimes called ...
  2. Investing Basics

    8 Essential Tips For Retirement Saving

    Whether you're a saver or a financial advisor who want to give their clients a leg up, these 8 tips are essential for financial planning.
  3. Retirement

    8 Essential Tips For Retirement Saving

    These eight tips can help your retirement savings grow.
  4. Budgeting

    The Complete Guide To Retirement Planning For 40-Somethings: Checking Your Status

    In some cases, individuals add as much as they can to their retirement nest egg and hope that it will be sufficient to meet their retirement needs. However, while such a strategy may work for ...
  5. Taxes

    RRSPs: The Benefits

    What an RRSP Is A Registered Retirement Savings Plan, or RRSP, is a special type of investment account designed to help Canadians save for retirement. The main advantage of an RRSP account, as ...
  6. Budgeting

    The Complete Guide To Retirement Planning For 40-Somethings: Retirement Resources

    Having even a general understanding of the rules that apply to your retirement account can help you effectively manage your transactions and avoid errors. The following are some of the publications ...
  7. Professionals

    Types of Retirement Plans

    Types of Retirement Plans
  8. Taxes

    RRSPs: Conclusion

    If you're a young investor, retirement may seem like it's a long way off, but we hope that this tutorial has encouraged you to think about planning ahead. After all, starting at a young age is ...
  9. Taxes

    RRSPs: Introduction

    This tutorial is your one-stop RRSP shop. Here we explore the ins and outs of RRSP planning and investing. Specifically, we look at what an RRSP is, what its advantages are, how you can set one ...
  10. Professionals

    Retirement Planning for the Self-Employed

    How to select a qualified retirement plan if you are self-employed and have no employees.
RELATED FAQS
  1. 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 >>
  2. I overcontributed to my Roth, then lost half of this money to the market. Does the ...

    It depends. If the excess contribution is removed from your Roth IRA by your tax-filing deadline plus any extensions, along ... Read Answer >>
  3. What are the Registered Retirement Savings Plan (RRSP) contribution limits?

    Review annual contribution limits for Registered Retirement Savings Plans and figure out how much you can invest for your ... Read Answer >>
  4. Should a Canadian citizen who lives and works in the U.S. continue to contribute ...

    No, a U.S. resident should not contribute to a RRSP account. RRSP contribution rules allow you to contribute a certain percentage ... Read Answer >>
  5. I overcontributed to my 401(k). What are my options?

    If you overcontributed (made excess deferral contributions) to your 401(k) plan account, you should notify your employer ... Read Answer >>
  6. What are the main reasons not to get a Registered Retirement Savings Plan (RRSP)?

    Find out some of the reasons why you might want to reconsider opening up a Registered Retirement Savings Plan and instead ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center