50th Birthday candles on a cake

What are catch-up contributions?

Sep 27, 2022
Empower Insights

What turning 50 means for retirement account limits

Ever get behind on your favorite TV show because, well, life gets busy, or you’ve got other priorities?

Then you spend an entire weekend binge-watching to get caught up on all the latest drama, action and excitement.

Making retirement plan catch-up contributions can be similar: If you’re age 50 or older, the IRS lets you save more than the typical limit. They essentially allow you to make up ground on reaching your financial goals in case you weren’t able to save much when you were younger.

Read on to learn what catch-up contributions are, why they matter and when you can take advantage of them. 

How do catch-up contributions work?

Catch-up contributions were introduced in 2001 as part of the Economic Growth And Tax Relief Reconciliation Act. They give people who are age 50 and over, or who turn 50 by the end of the calendar year, a chance to save more in their 401(k)s, IRAs and other retirement accounts.1,2  

Catch-up contributions are considered elective deferrals, or deposits, an employee makes from their pay into their retirement account that surpass a legal limit, a plan-imposed limit or the actual deferral percentage (ADP) limit for highly compensated employees (HCEs).

What are the 2022 and 2023 catch-up contribution amounts?

  • In 2022, workers 50 or older (or who turn 50 at any point during the calendar year) with a 401(k), 403(b) or an eligible 457 plan can contribute up to additional $6,500 to their account. In 2023, the allowed catch-up amount is $7,500.
  • IRA holders, meanwhile, can save up to $1,000 more to help them grow their nest egg. In 2023, the IRA catch-up contribution remains the same at $1,000.
  • SIMPLE 401(k) participants can defer up to an extra $3,000. In 2023, the allowed catch-up amount is $3,500.

How much total can I save this year?

Every year, the IRS comes out with new regulations on how much you can contribute to your retirement plan that year.

In 2022, for example, if you’re enrolled in a workplace program like a 401(k), a 403(b) or an eligible 457 plan, you can save up to $20,500 for retirement. In 2023 you can save up to $22,500.

The IRS annual limit for both a traditional IRA and a Roth IRA is $6,000 in 2022 and $6,500 in 2023. For those with a SIMPLE 401(k) plan, the standard deferral amount in 2022 is $14,000 and in 2023 its $15,500.3,4

But catch-up contributions provide those age 50 and older with an opportunity to go above and beyond IRS standard thresholds. That means if you’re already 50 or will be 50 later this year, you can save a grand total of:

  • $30,000 in your 401(k), 403(b) or eligible 457 plan.
  • $30,000 in a government thrift savings plan.
  • $7,500 in a traditional or Roth IRA.
  • $19,000 in a SIMPLE 401(k) account.
  • $19,000 in a SIMPLE IRA.

Even if your 50th birthday is December 31, you still qualify to begin making catch-up contributions at any point in 2022. 

A man reviews finances on his laptop

How do I make catch-up contributions?

In most cases, it should be pretty simple. You’ll likely just need to log in to your retirement account and then increase your contribution rate. Most plans will let you update your deferral percentage and view your balance online.

There are three key factors to keep in mind, however:

  1. As mentioned above, some plans set plan-imposed limits on elective deferrals that may be different than IRS-imposed limits. It’s important to understand the rules and details of your specific plan. Also, if you’re a highly compensated employee, you may have different limits as well.
  2. The IRS imposes an overall limit on the amount of combined employee and employer contributions that can be added to your retirement account each year. The max cap in a 401(k) in 2022 is $61,000, or $67,500 if you include catch-up contributions (or 100% of your compensation if that value is lower).The max cap in 2023 is $66,000, or $73,500 if you include catch-up contributions.
  3. There is a deadline of December 31 to make any contributions, including catch-up contributions, to your employer-sponsored plan for that given year. On the other hand, you can continue adding to your IRA until Tax Day of the following year. So, for 2022, you actually have until April 18, 2023, to make IRA contributions.6,7

What are the benefits of making catch-up contributions?

When you were just starting out in your career, you may not have had the same flexibility with your bills and expenses that you do today. Maybe you were preparing for a new baby, saving for a new house or trying to pay off your student loans. That’s where catch-up contributions come into play.

They can help you:

  • Boost your nest egg. Above all, by catching up you can focus more on saving for your future and having enough to fund your golden years. Compound interest also gives your money the opportunity to keep growing — and growing — your savings because any potential earnings are reinvested into your account.8
  • Reduce your taxable income. Catch-up contributions are extra savings on top of regular contributions. As a result, they could bump you into a lower tax bracket, which means your income would be taxed at a lower rate.9
  • Gain ground. Some professionals suggest you’ll need about 80% of your current earnings to cover your cost of living in retirement.10 Catch-up contributions can help you “make up for lost time” and potentially achieve your desired retirement income.

For more direction, check out Empower’s free Retirement Planner. It’s an easy-to-use tool that can help you estimate how much money you may need to live comfortably in retirement and identify ways to make progress.

What should I do next?

Making catch-up contributions is just one of many ways you can prepare for your future, especially as you get closer to retirement. The most important thing, though, is to keep saving as much you can to achieve your goals. As always, it’s a good idea to meet with a financial professional who can help see if you’re on the right track. 



1 IRS.gov, “Retirement Topics - Catch-Up Contributions,” September 2022.

2 Congress.gov.

3 Investopedia, “Catch-Up Contribution,” December 2021.

4 Smart Asset, “All About Catch-Up Contributions,” August 2022.

5 IRS.gov.

6 U.S. News and World Report, “Year-End Retirement Planning Deadlines for 2021,” October 2021.

7 CNBC, “You’ve likely missed the deadline to max out a 401(k) this year. Here’s what else you can do,” December 2020.

8 Bank Rate, “What is compound interest?,” March 2022.

9 The Motley Fool, “Understanding Catch-Up Contributions,” June 2022.

10 The Motley Fool, “How Much Do I Need to Retire?,” September 2022.

Latest Empower Insights

A child at a doctors office receiving a hearing aid
Nov 16, 2022
Empower Insights

What does an HSA cover?

A quick guide to the out-of-pocket expenses your health savings account can cover.

Graphic showing a percentage sign inside frame of a house
Nov 15, 2022
Empower Insights

Mortgage rates and the housing market

As if inflation levels weren’t high enough, home buyers are now seeing the highest mortgage rates in more than a decade.

Carefully consider the investment option’s objectives, risks, fees and expenses. Contact Empower for a prospectus, summary prospectus for SEC-registered products or disclosure document for unregistered products, if available, containing this information. Read each carefully before investing.

Securities, when presented, are offered and/or distributed by Empower Financial Services, Inc., Member FINRA/SIPC. EFSI is an affiliate of Empower Retirement, LLC; Empower Funds, Inc.; and registered investment adviser, Empower Advisory Group, LLC. This material is for informational purposes only and is not intended to provide investment, legal or tax recommendations or advice.  

IMPORTANT: The projections, or other information generated on the website by the investment analysis tool regarding the likelihood of various investment outcomes, are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. The results may vary with each use and over time.

Investing involves risk, including possible loss of principal.

Insurance products are issues by or offered through Empower Annuity Insurance Company of America, Corporate Headquarters: Greenwood Village, CO; or in New York, by Empower Life & Annuity Insurance Company of New York, Home Office: New York, NY. 

The managed account service is part of the Empower Advisory Services suite of services offered by Empower Advisory Group, LLC, a registered investment adviser.

The Empower Institute is a research group within Empower.

“EMPOWER” and all associated logos, and product names are trademarks of Empower Annuity Insurance Company of America.

All features may not currently be available and are subject to change without notice. ©2022 Empower Retirement, LLC. All rights reserved.

Unless otherwise noted: Not a Deposit | Not FDIC Insured | Not Bank Guaranteed | Funds May Lose Value | Not Insured by Any Federal Government Agency.