Catch-Up Contribution
An additional retirement account contribution allowed for individuals age 50 and older, above the standard annual contribution limits.
Understanding Catch-Up Contribution
In 2024, the catch-up contribution for 401(k)/403(b) plans is $7,500 (total $30,500) and $1,000 for IRAs (total $8,000). SECURE 2.0 creates a higher catch-up limit of $10,000 for those aged 60-63 starting in 2025. IUL has no catch-up concept because there are no statutory contribution limits - those who start late can fund aggressively within MEC limits regardless of age.
Why This Matters for Retirement: Understanding Catch-Up Contribution is essential for making informed decisions about tax-free retirement income strategies. Whether you are evaluating an IUL policy, planning Roth conversions, or comparing retirement vehicles, this concept directly affects your outcomes.