What are catch-up contributions?

Catch-up contributions allow you to give your nest egg a boost, or catch up on retirement savings if you’re not on track. The IRS limits how much you can contribute to tax-advantaged retirement savings accounts, such as 401(k)s and individual retirement accounts (IRAs). But when you turn 50, you can tack on catch-up contributions — and make even higher contributions to 401(k)s when you’re ages 60 to 63.

For 2026, the catch-up contribution limit for 401(k)s is $8,000 if you’re ages 50 through 59, as well as over age 60. If you’re ages 60 to 63, that figure is $11,250. This also applies to 457(b) and 403(b) plans. If you’re 50 or older, you can contribute an extra $1,100 to an individual retirement account.

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The benefit of contributing more money

Extra contributions can significantly add up as you’re saving for your golden years. Because many people are in their peak earnings years in their 50s, it can be a good time to set some extra money aside for retirement.

Depending on how long your retirement is, some of those savings will have multiple years or even decades to compound. The more money you have in your retirement accounts, the more options you have when it comes to when to take out Social Security and when to retire, as well as how much to spend on your lifestyle in retirement and how much money you can leave to your heirs.

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Because of the tax benefits of accounts such as 401(k)s, you may also be able to lower your tax bill by investing the extra dollars in a retirement savings account versus a taxable brokerage.

“Say you’re currently in the 32% federal tax bracket. You’ll save $1,200 in taxes by making the super catch-up now and then enjoy tax-deferred growth on the full contribution until the money is withdrawn — by which time you’ll probably be in a lower tax bracket,” the Teachers Insurance and Annuity Association of America (TIAA) says on its website. “That tax-deferred growth can add up quickly, even for someone only 10 years from retirement.”

It’s important to review your specific retirement plan and financial situation to ensure that making catch-up contributions makes sense for you. Some people may want to put their money towards other goals, for instance. But if you were unaware of the benefit of catch-up contributions and are now in your 50s or 60s, it’s not too late to course-correct and add more money to your retirement savings accounts.

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