Bank like a financial pro with the Alliant mobile app. Make payments, deposit checks, manage cards and so much more.
Renovate your kitchen, pay off high-interest debt, or have access to emergency funds when you need it with an Alliant Home Equity Line of Credit.
Browse new and used vehicle inventory, and qualify for a rate discount when you buy!81
Separate each of your savings goals into an Alliant Supplemental Savings Account so you can visualize your progress.
By Pam Leibfried
If you participate in a workplace 401(k), you are probably aware that the contribution limit specified by the IRS is $19,500 for both 2020 and 2021. But if you are over 50, you are also eligible to save an additional $6,500 in “catch-up contributions” to boost your retirement savings as you approach retirement age. You can also make an additional $1,000 catch-up contribution to an IRA.
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 have until December 31 to make catch-up contributions to your 401(k). If you have an IRA, you have until April 15, 2021 to make your IRA catch-up contributions.
If you turn 50 next 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, 2021. So if you are 49 for part of the year and are contributing the 2021 maximum of $19,500 to your 401(k) and want to contribute the maximum $6,500 catch-up amount for 2021, you don’t have to wait until your fiftieth birthday to start making your catch-up contributions. You can start to up your 401(k) contributions in January so that your contributions are spread evenly over all your 2021 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.
This information is not intended to be a substitute for specific individualized tax or legal advice. You should discuss your specific situation with a qualified tax or legal advisor.
Sign up for our monthly newsletter to help you stay at the top of your financial game.
Welcome! You'll now have financial tips sent to you directly each month.
You are leaving Alliant’s website to enter a website hosted by an organization separate from Alliant Credit Union. The products and services on this website are being offered through LPL Financial or its affiliates, which are separate entities from, and not affiliates of, Alliant Credit Union.The privacy and security policies of the site may differ from those of Alliant Credit Union.
You are leaving an Alliant Credit Union website and are about to enter a website operated by a third-party, independent from Alliant Credit Union. Alliant Credit Union does not manage the operation or content of the website you are about to enter. Alliant Credit Union is not responsible for the content and does not provide any products or services at this third-party website. The privacy and security policies of the site may differ from those of Alliant Credit Union.