Age 50
Anyone age 50 or older can make additional catch-up contributions to their 401(k) of up to $6,500 to make up for the years they didn’t save enough. The maximum 401(k) contribution is $26,000 in 2020. Employees age 50 and over can also put aside an extra $1,000 in an IRA, or a maximum of $7,000 for 2020.
“The increase to the contribution limit is fantastic for those who can take advantage of maxing out those contributions,” says Laura Morganelli, a certified financial planner for Abacus Wealth Partners in Philadelphia. Making catch-up contributions helps older workers maximize their retirement accounts and become eligible for bigger tax write-offs before retiring.
