Catch-Up Provisions May Help You Invest More
If you're getting close to retirement but feel like you need to invest more, learn about the catch-up contributions that may be available to you. Keep in mind that investing involves market risk, including possible loss of principal.
Ways to catch-up
If you're at least age 50 and eligible, there are catch-up provisions that allow you to contribute more than the standard annual deferral limits. Catch-up provisions are tax-deferred until withdrawal when they're taxed as ordinary income. Distributions made prior to 59½ may be subject to a 10% penalty tax. All taxable distributions at any age are subject to ordinary income tax, and surrender charges may apply.
- Age 50+ Catch-Up – In a tax year when you're 50 or older and are actively employed, you may possibly be able to defer up to $6,500 over the normal deferral limit (in 2020, as much as $19,500 or 100% of the employee's includible compensation for his or her most recent year of service – whichever is less) to your 457(b), 401(k) and/or 403(b) plans – which may be up to a possible combined total of $52,000.
- Special 457(b) Catch-Up – If you're within three years before the year you will retire, you may possibly be able to defer as much as $39,000 to your 457(b) plan – and $26,000 to your 401(k) or 403(b) plan – for a possible combined total of $65,000.
Get the help you need
Read more details and rules for Catch-Up Provisions (PDF).
Talk with one of our Team MSRP Retirement Specialists for more information about catch-up contributions. Neither Nationwide® nor our representatives offer tax or legal advice. Consult your own counsel before making any decisions.