What is the 401(k) catch-up contribution?


Quick Answer

A 401(k) catch-up contribution is an additional allowance for participants who are 50 years or older. As of 2014, the maximum amount for a catch-up contribution is $5,500 per year, which would be in addition to the $17,500 statutory limit.

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Full Answer

A vast majority of plans allow for catch-up contributions to offer participants the chance to increase their retirement savings in the latter stage of their careers. Catch-up contributions must come from a payroll deduction, and on several occasions, the 401(k) plan will need to be amended to allow for such a payment. Employers are not forced to match these added contributions.

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