The Power of Catch-Up Contributions: Accelerating Retirement Savings After 50

Why consider catch-up contributions? Ask 100 financial advisors how much money you need to retire, and you’ll get 100 different answers. There are so many variables between people; lifestyle, health, location. And there are so many unknowns; health, inflation, taxes. That’s why there is no single answer to the question of how much money you need to retire and so many ways to get a ballpark number; the 4% rule, the rule of 25, 10 to 12 times your annual income at retirement age.

But many Americans are well behind even the lowest end of a ballpark calculation for retirement. A survey found that only 14% have $100,000 or more in their retirement accounts, and 78% have less than $50,000.

If you need to rev up your retirement savings, there is a tool that can help; catch-up contributions.

What Are Catch-Up Contributions?

Catch-up contributions are additional amounts of money that those aged 50 and older can contribute to their retirement savings accounts above what the IRS allows for those under 50.

Retirement Catch-up contributions apply to:

  • 401(k)s
  • IRAs
  • 403(b)s
  • Governmental 457(b)s
  • The federal government’s Thrift Savings Plan
  • HSA (Those aged 55 and older)

Catch-Up Limits

Each eligible account has an annual contribution and catch-up limit set by the IRS. Some years the limits increase, but not always every year. For 2023, these are the limits and catch-up limits:

  • 401(k)s: $22,500, $7,500
  • IRAs (Roth and Traditional): $6,500, $1,000
  • 403(b)s: $22,500, $7,500
  • Governmental 457(b)s: $22,500, $7,500
  • SARSEPs: $22,500, $7,500
  • The federal government’s Thrift Savings Plan: $22,500, $7,500
  • HSA (Those aged 55 and older) $3,850 for individuals, $7,750 for families, $1,000


The main requirement is age, to be 50 or over (55 in the case of HSAs). Those 50 and older by the end of the calendar year are typically eligible to make catch-up contributions.

Some plans may have their own requirements. For example, employees with 15 or more years of service may be eligible to make extra contributions to their 403(b) plans in addition to the regular catch-up contributions based on age.

Alternative to Catch-Up Contributions

One of the most significant expenses in retirement may be healthcare costs, particularly if you need long-term care, something typically not covered by Medicare. Long-term care insurance can go a long way toward mitigating those expenses, but it’s rather expensive.

If you or your spouse have health issues, it may be worth considering using the money you would have used to make catch-up contributions to buy long-term care insurance.

Are Catch-Up Contributions Worth It?

For most people, the answer is “Yes.” While living expenses typically decrease in retirement, the reduction may not be as much as you think. You can expect to spend 55% to 80% of your pre-retirement income each year during retirement.

And you have inflation to consider. Between 2000 and 2020, inflation only rose above 3% five times. In 2021, it hit 4.70%, and in 2022, it skyrocketed to 8%. All those years with low inflation rates could easily lull you into thinking it would stay that way forever, but that’s not what happened.

And inflation is a significant risk factor for retirees. Between March 2022 and February 2023, inflation ate into purchasing power by more than 7%.

Social Security does have cost-of-living adjustments (COLAs) to help beneficiaries deal with inflation, but retirement accounts don’t. Catch-up contributions can help pad your retirement savings against inflation and other threats to your retirement.

If you have any questions about retirement planning or any other aspect of financial planning, reach out. We’re here to help you Create Life the Life You Love.

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