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Saving for Retirement

Turning 50? Catch Up on Retirement Savings

You can start contributing more cash to your IRA, 401(k) and other retirement accounts once you reach the milestone.

Are you afraid you haven’t saved enough for retirement? If you’re 50 or older, the tax code gives you lots of incentives to make up for lost time.

See Also: SLIDE SHOW: 10 Most Tax-Friendly States for Retirees

Start with your individual retirement account. This year, anyone 50 or older can add an extra $1,000 to their Roth IRA or traditional IRA, for a total contribution of $6,500. You don’t have to wait until your actual birthday to make the additional $1,000 contribution. You can do it any time during the year you turn 50.

If you have an employer-sponsored retirement plan, such as a 401(k), you can save even more. Workers 50 and older can add an extra $5,500 to their plan this year, for a total 2014 contribution of $23,000.

Some plans allow additional catch-up contributions. For example, 457 plans, which are retirement plans for public sector employees, offer a pre-retirement catch-up option that permits workers to sock away up to double the maximum contribution per year for three years before their normal retirement date. That would work out to a pre-retirement catch-up contribution of $35,000 in 2014. Some public sector workers take advantage of this feature to invest a large payout from unused sick leave or vacation days in their retirement plan. Just keep in mind that you can’t use both the age-50 catch-up contribution and the pre-retirement catch-up in the same year.


Some 403(b) plans, which are often offered to teachers and health care employees, allow workers with 15 years of service to make an extra catch-up contribution. The rules can be tricky. Check with the IRS or your 403(b) plan provider for details.

Use our Retirement Savings Calculator to figure out how much you will need to save now to enjoy life later, and check out our Retiree Tax Map to see which states are the most tax friendly and least tax friendly toward retirees.