Are you thinking about retirement and are concerned you haven’t been contributing enough to your employer sponsored retirement plan account? If so, and you will be turning 50 years of age in 2015 or are 50 years of age, you can increase your elective deferral plan contributions over the current statutory limit if your employer sponsored plan account allows for catch-up contributions.
For 2015, the maximum amount of elective contributions a participant is able to defer, the statutory limit, is $18,000. Employees that are over 50 years old can contribute an additional $6,000. These additional contributions are made through payroll deductions. (Note that the amount of catch-up contributions an eligible participant is allowed to make changes on a yearly basis, and regular plan contributions must reach the plan’s annual deferral limit before actual catch-up contributions can begin.)
Catch-up contributions are designed to help you make-up any retirement savings shortfall by bumping up the amount you can save in the years leading up to retirement. These extra contributions could make a significant difference in your retirement-age wealth. Talk to your retirement plan advisor or plan administrator today for more information.