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401k Catch Up ContributionsIf you are older than 50 years or will be 50 by the end of the tax year, then the IRS has a special provision allowing you to contribute to your 401k above and beyond the typical dollar limits set for your 401k plan. These contributions are called "401k catch up contributions". 401k Catch up contributions for traditional 401k plans or safe harbor 401k plans:According to the IRS, for 2024 the 401k contribution limit is $23,000 (this an increase from the 2023 401k contribution limits of $22,500). This is the maximum amount you can contribute to your safe harbor or traditional 401k plan. However, if you are 50 years old or older, or you will be 50 during the current year then you are allowed to defer an additional $7,500 from your salary into your company's 401k plan in 2024 provided your company's 401k plan allows for catch up contributions. Not all 401k plans offer catch up contributions nor are they required by law to do so. The $7,500 2024 401k catch up contribution limit is unchanged from the amount allowed for 2022. Important to note that you need to make the catch-up 401k contribution before the end of the year. Similarly, the 2024 catch up contribution limit for participants in 403b, most 457 plans, and the federal government’s Thrift Savings Plan (TSP) is also $7,500.
What if your employer does not offer 401k catch up contributions?In the event that your employer does not offer catch up contributions in your traditional 401k plan then you may be eligible to defer the extra catch up contribution amount if you work for more than one employer and participate in 2 different 401k plans. So, if you are 50 years or older then instead of having a maximum deferral amount of $23,000 for both 401k plans, you can actually defer the maximum limit of $23,000 plus the extra $7,500 catch up contribution amount(for 2024).
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