What are 401(k) catch-up contributions?

Taking advantage of 401 (k) catch-up contributions will allow you to save thousands more for retirement each year. A 401 (k) plan is an employer-sponsored retirement plan with valuable tax benefits. It allows employees to contribute a portion of their pre-tax salary.

How do I make catch-up contributions to a retirement plan?

Plan participants must make catch-up contributions to a retirement plan via elective deferrals. Catch-up contributions must be made before the end of the plan year. A SIMPLE IRA or a SIMPLE 401 (k) plan may permit annual catch-up contributions up to $3,500 in 2023 and $3,000 in 2015 - 2022.

What is the 401(k) catch-up contribution limit in 2023?

The 401 (k) contribution limit increased from $22,500 in 2023 to $23,000 in 2024. The catch-up contribution limit remained at $7,500 for 2023 and 2024. “Starting in 2025, individuals aged 60 to 63 will be able to make even higher catch-up contributions in employer plans, equal to 150% of the age 50 catch-up contribution limit,” Tierney said.