Maximize Retirement Savings With Catch-Up Contributions
As you are planning for your retirement, it’s important to save early and often. If you wish to maximize your 401(k), IRA or other retirement accounts’ earning potential, you may wish to contribute to these accounts at the highest level permitted by the IRS. Provided below are 2021 contribution limits for individuals who are not yet age 50, as well as limits for those age 50 and older who are eligible to make catch-up contributions.
Please note, to be eligible for catch-up contributions, there is no other requirement than to have reached age 50 or older. And, even when contributed later in one’s career, catch-up contributions can have a large impact on retirement savings, as illustrated in the table to the left.
As illustrated, based on an annual return of 5%, there is an additional $135,945 in gain in this example Traditional IRA by the individual who made catch-up contributions beginning at age 50 versus the individual who did not.* Making catch-up contributions can make a big difference.
For additional assistance with your retirement planning needs, please contact your wealth advisor.
Mariner Wealth Advisors
“Retirement Topics-Catch-Up Contributions,” irs.gov
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