Money
Catch-up contributions after 50: how much more you can put away
From the year you turn 50, you can contribute more than the standard limit to a 401(k) and an IRA, and there is an additional higher catch-up window in the early 60s. The amounts are set by the IRS each year; check the current figures on irs.gov before you set your deferral. For most people with a match, filling the 401(k) first is right; for people without one, the IRA and HSA come first.
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Why it matters more than it looks
Fifteen years of maximum catch-ups, invested, is the difference between a tight retirement and a comfortable one for most Gen X households. The dollars added after 50 also arrive when many of the big expenses (childcare, the first home) are behind you.
Catch-up or mortgage?
If your mortgage rate is below what a diversified portfolio has historically returned, and you have an employer match, the catch-up usually wins on the math. If the rate is high or the debt keeps you up at night, split it. Nobody regrets either one at 65.
Questions people ask
- What are the catch-up limits this year?
- They change annually. Search "retirement topics catch-up contributions" at irs.gov for the current year's figures, or ask your plan administrator.
- Can I do catch-ups in both a 401(k) and an IRA?
- Yes. They are separate limits.