Did you know that eligible Plan Participants can make savings Catch-up contributions into their company 401(k) account beginning on or after the year in which they turn 50?
What are catch-up contributions?
“Catch-up contributions” are supplemental tax-deferred employee contributions that are in addition to regular contributions. These supplemental contributions can be made by participants age 50 or older who would like to make contributions above the maximum amount they could otherwise make to the 401(k) Plan.
Who is eligible to make catch-up contributions?
To be eligible to make catch-up contributions, a participant must be:
· age 50 or older during the calendar year in which the catch-up contributions are made (even if the participant becomes age 50 on December 31 of that year),
· currently employed and in pay status,
· contributing either the maximum contribution percentage allowed or contributing an amount that will cause him or her to reach the Internal Revenue Service (IRS) elective deferral limit by the end of that year which is $18,000 in 2017.
· your plan has to permit catch-up contributions (90% do!)
· your plan has to permit catch-up contributions (90% do!)
How much can I contribute?
If you are eligible, you can contribute up to the annual maximum dollar amount ($6,000 in 2017) allowed by the IRS. Catch-up contributions have an annual IRS limit, just as regular contributions have an annual IRS elective deferral limit.
What if I already have catch up elections being withheld in 2016?
Then you do not need to do a thing.
Then you do not need to do a thing.
How do I elect to make catch-up contributions or change the amount that I currently contribute?
· Log on to your company's 401(k) provider.
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