Playing Catch Up

Contributing to tax-deferred retirement plans is a major component in any retirement savings plan; if you're over fifty, you can exceed the normal annual contribution limits.

For 401(k), 403(b), 457(b) and SAR-SEP plans, the catch-up is $6,000 in 2015, which means, if you're over fifty, you can contribute up to $24,000. Beginning in 2016, the maximum catch-up contribution will be adjusted for inflation each year in $500 increments.

For IRA contributors, the Age 50+ catch-up amount is $1,000 for 2015 which is where is has been for the last several years. There is no automatic inflation adjustment to the maximum catch-up contribution for IRAs; however, the IRS has the authority to increase it at any time.

For the most current catch-up contribution limits on all retirement plans, go to https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-contributions.

The information provided is not intended to be legal, tax, or financial advice or recommendations for any specific individual, business, or circumstance. TowneBank cannot guarantee that it is accurate, up to date, or appropriate for your situation. Financial calculators are provided for illustrative purposes only. You are encouraged to consult with a qualified attorney or financial advisor to understand how the law applies to your particular circumstances or for financial information specific to your personal or business situation.