Catch-Up Contribution

Extra retirement-account contributions allowed once you reach age 50.

Definition

Starting in the year you turn 50, the IRS lets you contribute above the standard annual limit to 401(k)s and IRAs, helping those behind on savings make up ground in their highest-earning years. The catch-up amounts are set by the IRS and adjust over time. They stack on top of the regular limit.

Example

A 52-year-old can add catch-up dollars to a 401(k) beyond the standard contribution cap.

Related terms

401(k)
An employer-sponsored retirement account funded by payroll deductions, often with a company match.
Traditional IRA
An individual retirement account where contributions may be tax-deductible now and taxed at withdrawal.
Roth IRA
An individual retirement account funded with after-tax money that grows and is withdrawn tax-free.

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