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.

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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?

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.

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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.

Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.