Experts recommend investing for retirement early and often. When life gets in the way, however, that ideal may not be achievable. The government has provisions in place to help employees over the age of 50 either get on track or augment already solid savings. The retirement account contribution limits for employees over 50 is larger than the standard contribution limits.
The “catch-up” provision was created in 2001 by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). The act provided relief to investors who lost significant value in their retirement portfolios in the wake of the dot-com bubble. From the bubble’s peak in March of 2000, stocks had declined in value by 75% by October of 2002. The law also revised the life expectancy tables used for determining retirement ages.
In 2006, the Pension Protection Act made provisions for catch-up contributions permanent.
As of 2022, employees over 50 may contribute:
| Account Type | Additional Contribution | |
| IRA | $1,000 | on top of the standard $6,000 contribution limit |
| ROTH IRA | $1,000 | on top of the standard $6,000 contribution limit |
| 401(k) | $6,500 | on top of the standard $20,500 contribution limit |
| SIMPLE 401(k) | $3,000 | on top of the standard $14,000 contribution limit |
Note: These contribution limits are for employees only. Small business owners may be able to contribute more as employer contributions.
Call our office at 480-392-6801 if you would like to talk about your retirement options
