When Can I Make Catch-Up Contributions to 401K, IRA, 403b and SIMPLE IRA Retirement Plans

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Catch-up contributions allow people who feel that they do not have enough of a nest egg to make higher retirement plan contributions as they approach retirement. If you are over or turning 50 in a given calender year you are eligible to make additional or catch-up contributions to your current retirement plan (401K, 403b, IRA etc). The catch-up contribution is not prorated or apportioned in the year you turn 50. This means that as long as you turn 50 by December 31st of the given year, you can make the full catch-up contribution amount.

In addition to standard deferral/contribution limits, eligible participants can make catch-up contributions up to $5,500 in 2011 and 2012. The following plans are covered by this maximum limit : 401(k), 403(b), and governmental 457(b). Plan contributions are not treated as catch-up contributions until they exceed the $17,000 standard limit (for 2012; $16,500 for 2011). So for those over 50, the maximum contribution limit in 2012 would be $22,500. Catch-up contributions are generally made in the same manner as regular contributions, i.e. through an automatic payroll deduction or via the plan administrator. They must also be made before the end of the plan year which varies by plan and employer, but generally ranges from December 31st to April 15th.

Other retirement plan catch-up  contribution limits

For those over 50, SIMPLE IRA or SIMPLE 401(k) plans may permit catch-up contributions up to $2,500 in 2011 and 2012. This is above the standard $11,500  contribution limit for SIMPLE IRA plans. You can also make catch-up contributions of up to $1,000 in 2012 (unchanged from 2011) to your Traditional or Roth IRA. Catch-up contributions to an IRA are due by the due date of your tax return (not including extensions).

SEP-IRAs, which have higher maximum contribution limits, do not allow additional catch-up contributions like the other tax-advantaged retirement plans discussed above.

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