Use Catch-Up Contributions
Once you turn 50, apart from your 401(k) contributions, you are allowed by the IRS to contribute more to your qualified retirement plans, beyond the regular contribution limit. These are known as catch-up contributions and are really useful to people approaching their retirement in rapidly increasing their account value and improving their 401(k) plans.
For example, in 2020, people aged 50 or older can make an additional contribution of $6,500, for a total of $26,000. Not bad, is it?
Leave a Reply