Turning 50 is a milestone, especially for retirement income planning. In a recent BlackRock study, more than 50% of investors surveyed expressed concern that their retirement savings may not be enough to support them throughout their lifetimes.
Add More Money to Your Savings
Did you know that if you qualify for catch-up contributions, you can make additional contributions to your individual retirement account (IRA), 401(k) plan, or other eligible retirement plan? Catch-up contributions are a way for individuals age 50 and older to defer more money to retirement plans – which can give a boost to retirement savings while deferring taxes.
In an era where retiring comfortably on Social Security and a company pension is getting tougher, the importance of personal retirement savings cannot be overstated. As retirement nears and you move into your peak earnings years, it’s important to be aware of ways to max out contributions.
Including catch-up contributions, current IRS rules allow employees who are 50 or older to contribute a total of up to $23,500 in pre-tax dollars to 401(k) accounts (as well as 403(b) and most 457 plans, as well as the federal government’s Thrift Savings Plan) in 2015. And individuals who are 50 and older can contribute up to $6,500 to a traditional IRA. The IRS periodically adjusts these limits to reflect changes in the cost of living.
Work with your financial advisor to see if you qualify for catch-up contributions and establish a retirement plan suited to your needs.