追赶的贡献
A recent survey found that 28% of workers are very confident about having enough money to live comfortably through their retirement years. At the same time, 27% are not confident.1
In 2001 congress passed a law that can help older workers make up for lost time. But few may understand how this generous offer can add up over time.2
The “catch-up” provision allows workers who are over age 50 to make contributions to their qualified retirement plans in excess of the limits imposed on younger workers.
它是如何工作的
Contributions to a traditional 401(k) plan are limited to $22,500 in 2023. Those who are over age 50 – or who reach age 50 before the end of the year – may be eligible to set aside up to $30,000 in 2023.3
留出额外的7美元,500 each year into a tax-deferred retirement account has the potential to make a big difference in the eventual balance of the account, 引申开来, in the eventual income the account may generate. (见附图).)
追赶的贡献 and the Bottom Line
This chart traces the hypothetical balances of two 401(k) plans. The blue line traces a 401(k) account into which $22,500 annual contributions are made each year. The red line traces a 401(k) account into which an additional $7,500 in contributions are made each year, 总共30美元,000 in contributions a year.
Upon reaching retirement at age 67, both accounts begin making withdrawals of $7,000 a month.
The hypothetical account without catch-up contributions will be exhausted before its beneficiary reaches age 80. Keep in mind, the 国税局 regularly updates these maximum contribution limits.
This hypothetical example is used for comparison purposes and is not intended to represent the past or future performance of any investment. Fees and other expenses were not considered in the illustration. 实际回报可能有所不同.
Both accounts assume an annual rate of return of 5%. The rate of return on investments will vary over time, particularly for longer-term investments.
在大多数情况下, you must begin taking required minimum distributions from your 401(k) or other defined contribution plan in the year you turn 73. Withdrawals from your 401(k) or other defined contribution plans are taxed as ordinary income, and 如果在59岁半之前服用, may be subject to a 10% federal income tax penalty.
1. EBRI.org, 2022
2. Economic Growth and 税 Relief Act of 2001
3. 国税局.政府,2023. Catch-up contributions also are allowed for 403(b) and 457 plans. Distributions from 401(k) plans and most other employer-sponsored retirement plans are taxed as ordinary income and, 如果在59岁半之前服用, may be subject to a 10% federal income tax penalty. 在大多数情况下, you must begin taking required minimum distributions from your 401(k) or other defined contribution plan in the year you turn 73.
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