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Catch-Up Contributions

        Catch-Up Contributions         

If you're fast approaching retirement age and becoming concerned about the amount of retirement funds you have set aside, the 2001 Tax Relief Act held some good news for you.  If you are over age 50, you are allowed to make "catch-up" contributions to your defined contribution retirement accounts.

 

Like normal IRA or 401(k) contributions, these catch-up amounts are tax deferred until they are removed from the retirement plan, at which point they will be fully taxed as income from retirement.

Catch-up amounts are tax deferred

 

Applicable employer-sponsored plans include Section 401(a) employees' trusts, Section 401(k), Section 403(b) annuity plans, SEP plans, SIMPLE and Section 457 plans. 

The additional catch-up deferral amounts are as follows:

 

2016
401(k), 403(b), SARSEP and 457 plans $6000
Simple plans $3000
IRAs $1000

 

As of now, the catch-up amounts listed above for 2016 will apply to all years thereafter as well.  These catch-up deferrals cannot be nondeductible contributions.

If you have questions on these additional deferral amounts or your own qualification to take them, please do not hesitate to give us a call.

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