Planning in Your 50s: Catch-Up Contributions | Adviser

Planning in Your 50s: Catch-Up Contributions

Turning 50 is momentous for so many reasons—including the extra boost it can provide to your retirement savings.

The IRS limits how much you can contribute to tax-advantaged retirement accounts each year. In 2022, that limit is $6,500 to individual retirement accounts (IRAs) and $22,500 to 401(k)s and other workplace retirement plans like 403(b)s and Thrift Savings Plans. At Adviser Investments, we encourage all clients to make consistent contributions to these accounts every year.

But the truth is many people don’t even come close to maxing out their retirement account contributions—especially in their younger years. And that can leave them lagging where they need to be as retirement approaches. That’s why the big 5-0 is such an important milestone: It’s when the IRS lets you start playing catch-up.

For most people, the 50s represent peak earning years. Making catch-up contributions to retirement accounts can help compensate for any deficit in your savings while still giving your investments a decade or more to compound.

If you have the cash flow to max out your retirement accounts in your 50s and to make catch-up contributions on top of that, we highly recommend it. In 2023, anyone over 50 can contribute an additional $1,000 to an IRA and an additional $7,500 to workplace retirement plans.

One rule of thumb is to aim to put 10%–15% of your salary toward retirement at this stage in your life. That said, don’t be overly concerned about hitting an arbitrary threshold. We advise our clients to save as much as they are reasonably able.

Higher earners should note that phaseout and upper income limits may make you ineligible to take full advantage of a traditional IRA’s tax deduction or to contribute to a Roth IRA. Check out Page 2 of our Key Financial & Tax Planning reference to see if you run into those limits.

If you have questions about how much you should be contributing to your retirement accounts and whether you are on track for retirement, please contact your wealth management team. We’re happy to help.


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