Return to The Money Mentor Blog

Playing retirement catch-up

January 15, 2015

By Pam Leibfried

Alliant financial consultants

If you participate in a workplace 401(k), you are probably aware that the contribution limit specified by the IRS is $18,000 (a $500 increase from last year’s limit). But if you are over 50, you are also eligible to save an additional $6,000 per year in “catch-up contributions” to boost your retirement savings as you approach retirement age.

Are you over 50?

According to IRS guidelines, if you are over 50, you are eligible to make catch-up contributions to your 401(k) or IRA, provided that you do not exceed the IRS’ IRA income phase-out limits. Please note that although the vast majority of employer-offered plans include the option of making catch-up contributions, they are not required to include catch-up contributions. If you are relying solely on a workplace 401(k) for your retirement savings, you should check your plan to confirm that catch-up contributions are offered. You can also check your plan to see if catch-up contributions are matched.

Are you turning 50 in 2015?

If you turn 50 this year and do not exceed the IRS' IRA income phase-out limits, you are eligible to make catch-up contributions throughout the year, even if your 50th birthday is December 31, 2015. If you are 49, are currently contributing the maximum of $18,000 to your 401(k) and want to contribute the maximum $6,000 catch-up amount for 2015, you don’t have to wait until your fiftieth birthday to start making your catch-up contributions. Now is the time to up your 401(k) contribution percentage so that your contributions are spread evenly over all your 2015 paychecks. Paycheck reductions of $500 per month will hurt a lot less than having even larger chunks of your paycheck withheld later in the year.


Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates. Alliant Credit Union and Alliant Retirement and Investment Services are not registered broker/dealers and are not affiliated with LPL Financial. The financial consultants of Alliant Retirement and Investment Services are registered representatives of LPL Financial. The LPL Financial Registered Representatives associated with this site may only discuss and/or transact securities business with residents of the following states: AK, AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, HI, IA, ID, IL, IN, KY, LA, MA, MD, ME, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NM, NV, NY, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VA, VI, WA, WI, WV, WY.

Not NCUA Insured

No Credit Union Guarantee

May Lose Value

The LPL Financial Registered Representatives associated with this site may discuss and/or transact securities business with residents of all 50 states.
*Financial consultants registered with LPL Financial.