401k Catch Up Contribution Limits 2023
If you are age 50 or over, you have the opportunity to make additional contributions to your retirement savings plan. This is known as the 401k catch up contribution, and it is available to those who have reached their 50th birthday. This means that if you have already maxed out the annual contribution limit for your 401k plan, you can still contribute more money to your retirement savings. The catch up contribution limit for 2023 is an additional $6,500.
The catch up contribution limit allows you to make additional contributions to your 401k plan beyond the regular annual contribution limit. This extra money can help you build a larger retirement nest egg and provide you with more financial security when you retire. It can also help you take full advantage of the tax-deferral and other benefits that come with investing in a 401k plan.
To be eligible for the catch up contribution, you must be age 50 or older as of the end of the year. You must also be actively employed by the employer sponsoring your 401k plan. If you are self-employed, you are eligible to contribute to a Solo 401k plan and may be eligible for the catch up contribution if you meet the age requirement.
The catch up contribution is an additional $6,500 for the 2023 tax year. This means that if you have already maxed out the regular contribution limits for the year, you can add an additional $6,500 to your 401k plan. This money can be used to help you build a larger retirement nest egg and provide you with more financial security when you retire.
In addition to the catch up contribution limit, there are also some other limits that you should be aware of. For example, the total contribution limit for the 2023 tax year is $58,000. This includes the regular contribution limit of $19,500, plus the catch up contribution of $6,500. If you are married and both of you have 401k plans, the total contribution limit for both of you is $116,000. This includes the regular contribution limit of $19,500 for each of you, plus the catch up contribution of $6,500 for each of you.
In order to take advantage of the catch up contribution limit, you must be sure to make your contribution before the end of the year. If you do not make your contribution before the end of the year, you will not be eligible to receive the additional $6,500 catch up contribution. In addition, you must make sure that your employer is aware of your catch up contribution and that it is included in your annual salary deferral limit.
The catch up contribution limit is an excellent way to save more money for retirement. If you are age 50 or over, taking advantage of this additional contribution can help you build a larger nest egg and provide you with more financial security when you retire. Be sure to review the limits and make your contributions before the end of the year in order to take advantage of this opportunity.
Conclusion
The 401k catch up contribution is an excellent way to boost your retirement savings. It allows those who are age 50 or over to make additional contributions to their retirement savings beyond the regular annual limit. For the 2023 tax year, the catch up contribution limit is an additional $6,500. Be sure to review the limits and make your contributions before the end of the year in order to take advantage of this opportunity.