Overcontribution

AAA

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.

INVESTOPEDIA EXPLAINS '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. Self-Directed RRSP

    A type of RRSP (Registered Retirement Savings Plan) whose owner ...
  2. Notice Of Assessment - NOA

    An annual statement sent by revenue authorities to taxpayers ...
  3. Roth IRA

    An individual retirement plan that bears many similarities to ...
  4. Registered Retirement Savings Plan ...

    Assets invested in an RRSP. RRSP contributions can be made at ...
  5. Retirement Readiness

    The state and/or degree of being ready for retirement. Retirement ...
  6. Registered Retirement Savings Plan ...

    A legal trust registered with the Canada Revenue Agency and used ...
RELATED FAQS
  1. I just learned that my 2004 and 2005 Roth IRA contributions are not allowed because ...

    The 2004 excess amount to your Roth IRA would have to be removed by October 15, 2005, to avoid the 6% penalty (assuming that ... Read Full Answer >>
  2. Places where I can open an IRA Account?

    An individual retirement account can be opened through a range of major financial institutions, including brokerage firms ... Read Full Answer >>
  3. What rate of return should I expect on my 401(k)?

    An employer-sponsored retirement plan such as a 401(k) can be a valuable tool in accumulating savings for the long-term. ... Read Full Answer >>
  4. What would privatized Social Security mean for Americans?

    The current Social Security system in the United States operates in a pay-as-you-go framework; the Social Security taxes ... Read Full Answer >>
  5. How does a defined benefit pension plan differ from a defined contribution plan?

    Employer-sponsored retirement plans are divided into two categories of plans: defined benefit pension plans and defined contribution ... Read Full Answer >>
  6. What are the best ways to pay off my mortgage quickly?

    There are two main strategies for paying off a mortgage more quickly, which can be used alone or in tandem: making larger ... Read Full Answer >>
Related Articles
  1. Options & Futures

    Retirement Planning Basics

    Realizing your post-work goals need not be daunting. We'll tell you everything you need to know to get - and stay - on track.
  2. Taxes

    Registered Retirement Savings Plans (RRSP)

    Learn how the Canadian government makes saving for your post-work years easy. We take you from your first contribution to your first withdrawal.
  3. Retirement

    Some Tax Considerations For Your Retirement Income

    Even if you don’t plan to retire, it’s still a good idea to think ahead about where to live, your income and how it all interacts with Social Security.
  4. Retirement

    Track Your Retirement Money With These Apps

    Try these four mobile and online apps to stay on top of your retirement income – in brokerage accounts, IRAs, 401(k)s, even Social Security.
  5. Professionals

    Advisors: Don't Overlook Not-Yet-Rich Millennials

    Financial advisors looking to grow their practices should focus on potential high-net-worth millennials.
  6. Retirement

    Don't Make These Top 10 Mistakes On Your Roth IRA

    Don't lose out on the benefits of a Roth by contributing too much, breaking rollover rules or making other avoidable errors.
  7. Retirement

    Converting A Traditional IRA To A Roth

    When is it a good idea to convert traditional IRA funds into Roth IRA funds? And when does it not make sense?
  8. Trading Strategies

    Top 7 Roth IRA Stocks for 2015

    Looking for stocks with long-term potential for your Roth IRA? Here are the top seven picks for 2015.
  9. Retirement

    When Is It Better To Forgo A Roth Account?

    Depending on how much you're currently earning, a traditional IRA sometimes offers more tax relief than its Roth counterpart.
  10. Professionals

    Your Clients and the Changing Retirement Landscape

    For many, retirement might not be the full stoppage of work and living a life of leisure but rather one of slowly phasing out of the workforce.

You May Also Like

Hot Definitions
  1. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  2. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  3. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  4. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  5. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
  6. Tangible Net Worth

    A measure of the physical worth of a company, which does not include any value derived from intangible assets such as copyrights, ...
Trading Center