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. Pension Adjustment - PA

    The amount of contributions that can be made to a Registered ...
  3. Retirement Contribution

    A monetary contribution to a retirement plan. Retirement contributions ...
  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. Retirement

    What's The Difference Between Retiring In Canada And America?

    American and Canadian governments provide many of the same types of services, but the subtle differences between the two countries are worth noting.
  2. Financial Advisor

    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

    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.
  4. Retirement

    8 Essential Tips For Retirement Saving

    These eight tips can help your retirement savings grow.
  5. Financial Advisor

    Retirement Planning for the Self-Employed

    How to select a qualified retirement plan if you are self-employed and have no employees.
  6. Retirement

    How Does a Pension Plan Work?

    A pension plan is a savings plan maintained by an employer on behalf of its employees for their retirement.
  7. Financial Advisor

    How to Advise Clients Behind on Retirement Savings

    Many Americans are behind when it comes to saving for retirement. Here's how advisors can help.
  8. Retirement

    4 Ways to Boost the Amount You Save for Retirement

    Retirement can easily last more than twenty years, which means you have to save a lot. Thankfully, there are ways to enhance the amount you put away.
  9. Retirement

    Why Saving 10% Won't Get You Through Retirement

    Retirement experts often tout the 10% rule: To have a good retirement, you must save 10% of your income. The truth is, most people need to save far more.
  10. Financial Advisor

    Maxing Out Your RRSP (Canadian)

    Increasing your savings will provide tax benefits - and peace of mind.
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 >>
Hot Definitions
  1. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  2. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  3. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  4. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
  5. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
  6. Four Percent Rule

    A rule of thumb used to determine the amount of funds to withdraw from a retirement account each year. The four percent rule ...
Trading Center