Tax Tip #293

Retirement plan participants age 50 or older with prior-year FICA wages over $145,000 (adjusted for inflation) who make age-based catch-up contributions are required to do so on a Roth basis only. Additionally, plans may allow a higher catch-up limit for Retirement Plan participants who attain age 60 through 63 during the calendar year. 

Retirement Plans that do not allow for Roth contributions may not offer catch-up contributions for employees who make over the $145,000 threshold. Retirement Plans, SARSEP, SIMPLE IRA, and SIMPLE 401(k) plans are not required to offer the higher catch-up for ages 60 to 63. 

If you are between the ages of 50 and 63 and have questions regarding catch-up contributions, reach out to a team member for more information.