The U.S. Internal Revenue Service (IRS) established a $6,000 limit on the catch-up contribution to qualified deferred tax plans such as 401(k) plans, 403(b) plans, SARSEP and governmental 457(b) plans. SIMPLE IRAs and SIMPLE 401(k) plans have catch-up contribution limits of $3,000 in 2015 and 2016. If you have traditional or Roth individual retirement accounts (IRAs), you can make catch-up contributions of up to $1,000 in 2015 and 2016.

Catch-Up Contributions

Congress modified existing laws governing deferred tax savings accounts to allow individuals 50 years or older to make contributions of funds to retirement plans in excess of statutory limits. In 2015, the maximum amount of contributions to retirement plans was $18,000. You can make catch-up contributions for a calendar year up to the lesser of either the catch-up contribution limit or the amount that is above your compensation over the elective deferral contributions that are not considered catch-up contributions.

Catch-up contributions are possible only if your retirement plan allows them. Catch-up contributions must be made by payroll deductions. Your employer can match your contributions, depending on its retirement plan policy.

SIMPLE 401(k) and 403(b) Plans

A SIMPLE IRA or a SIMPLE 401(k) plan is typically available for businesses with 100 or fewer employees. These do not have significant startup and operating costs compared to traditional 401(k) plans. While a SIMPLE IRA plan has a $3,000 limit for catch-up contributions, salary reduction contributions are not counted as catch-up contributions until they are in excess of the $12,500 limit for 2015 and 2016.

403(b) plans represent tax-deferred retirement accounts for public education organizations, some non-profit employers, cooperative hospital companies and self-employed ministers. The IRS allows employees with over 15 years of service to make additional contributions to 403(b) plans in addition to the regular catch-up contributions.