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Ask the Expert: Rebuild Your Retirement Savings with Catch-Up Contributions

If you withdrew funds from your retirement account over the past year, or halted contributions to make ends meet, you’re certainly not alone. The COVID pandemic really set some people back. Fortunately, for those who are age 50 or older, catch-up contributions are a great opportunity to quickly build — or rebuild — a retirement fund.

The catch-up provision allows people aged 50 or older on December 31 of any given year to make additional contributions to their retirement accounts beyond the regular annual contribution limits set by the IRS. The idea is to provide older workers the ability to make up for the years they didn’t, or were not able to, save enough.

401(k)s and Other Workplace Plans

Under 2021 limits for 401(k), 403(b), most 457 plans and the government’s Thrift Savings Plan, if you’re age 50 or older, you can contribute an extra $6,500 after you’ve reached the $19,500 maximum limit for all employees. That’s a total of $26,000.

If your employer offers a Savings Incentive Match Plan for Employees (SIMPLE) plan instead, your regular contribution maxes out at $13,500 in 2021. If you’re age 50 or older, you’re allowed to contribute an additional $3,000 — or $16,500 in total for the year.

Self-Employed Plans

If you’re self-employed, retirement plans such as an individual 401(k) or solo 401(k), also allow catch-up contributions. A solo 401(k) is a plan for those with no other employees. You can defer 100% of your self-employment income or compensation, up to the regular yearly aggregate deferral limit of $19,500, plus a $6,500 catch-up contribution in 2021. But that’s just the employee salary deferral portion of the contribution.

You can also make an “employer” contribution of up to 20% of self-employment income or 25% of compensation. The total combined employee-employer contribution is limited to $58,000, plus the $6,500 catch-up contribution.

Non-Roth Accounts

Catch-up contributions to Non-Roth accounts cannot only enlarge your retirement nest egg, but also reduce your tax liability. And keep in mind that catch-up contributions are available for IRAs, too.

It is important to note that deductible contributions may be limited or unavailable based on your income. And while most retirement plans offer catch-up contributions, not all do. Be sure to check with your employer.

Joseph Chemotti, CPA, CCIFP, is an audit partner with Dannible & McKee, LLP, a public accounting firm with offices in Syracuse, Binghamton and Albany, New York. Joe is a member of the American Institute of Certified Public Accountants Employee Benefit Audit Quality Center and has extensive experience providing auditing services on a variety of employee benefit plans ranging from defined contribution, defined benefit, and health and welfare plans. For more information on this topic, you may contact Joe at or visit us online at