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Rules For Catch-Up Contributions to Retirement Accounts

It doesn’t matter when your birthday is. You can start catch-up contributions anytime during the year you turn 50.

I’m trying to figure out how much I can contribute to my 401(k) plan next year. I turn 50 in April 2017. Can I sign up to make catch-up contributions at the beginning of the year, or do I need to wait to add the extra money until after my birthday? Are the rules the same for IRAs?

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You’ll be able to save a lot more money starting in 2017. It doesn’t matter when your birthday falls; as long as you’re 50 by December 31, you can make catch-up contributions anytime during the year.

The IRS has not announced the 2017 contribution limits yet, but people who were 50 or older in 2016 could contribute up to $24,000 to their 401(k)s this year, which includes the $18,000 regular contribution plus the $6,000 catch-up contribution. Those numbers may rise slightly in 2017.

You’ll also be able to make catch-up contributions to your IRA anytime next year. People who were 50 and older in 2016 could contribute $6,500 for the year, which includes the $5,500 standard contribution plus a $1,000 catch-up amount. Those limits may also rise slightly in 2017.

For more retirement-planning issues to consider after age 50, see How To Retire Rich: 6 Smart Steps at Ages 50-66.

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