Over 50? The IRS Wants to Boost Your Retirement

Photo by Dean Drobot / Shutterstock.com

Turning 50 opens the door to some special privileges. Retailers offer price breaks, restaurants serve up discounted fare and hotels welcome you with cheaper room rates.

Uncle Sam also salutes older Americans by offering special tax breaks to workers 50 and older who are trying to save for retirement. Yet, millions of people are unaware of this unique opportunity to save more.

Just 46% of self-employed workers and 60% of traditionally employed workers who are 50 or older know that the federal government allows people 50 and older to make “catch-up” contributions to their retirement savings accounts, according to a recent study by the nonprofit Transamerica Center for Retirement Studies.

Are you among the ranks of such workers?

How catch-up contributions work

In 2019, most Americans can contribute a total of $19,000 to workplace retirement accounts like 401(k)s. But Americans 50 and older can contribute an additional $6,000 to certain workplace retirement accounts — an amount the government characterizes as a “catch-up” contribution.

Catch-up contributions are also available to folks saving in individual retirement accounts (IRAs). For example, in 2019, most workers can contribute $6,000 to an IRA. But savers 50 and older can contribute an additional $1,000.

The news gets even better at age 55. At that point, folks with a health savings account (HSA) are eligible for a catch-up contribution of $1,000. That amount is in addition to the HSA contribution limits for 2019 of $3,500 for individuals and $7,000 for families.

You can learn more about catch-up contributions at the IRS website.

How to save more for retirement

Of course, most of us struggle to find two nickels to contribute to retirement savings, let alone $40,000. If saving is a challenge for you, don’t give up hope.

Money Talks News offers an online course — The Only Retirement Guide You’ll Ever Need — that is designed for people between the ages of 45 and 65.

Taught by Money Talks News CEO and founder Stacy Johnson, the course combines lessons, videos, worksheets and quizzes to help you reach your retirement savings goals.

You can also learn more about saving for retirement in Money Talks News stories such as:

Earn money when you shop — plus a free $10 bonus

Earn extra money by using Rakuten (formerly known as Ebates) — a site where you can earn up to 40% cash back at more than 2,500 stores. As a bonus for joining Rakuten, you'll earn $10 when you spend at least $25 within the first 90 days. Start earning cash back and claim a free $10 bonus today.

7 Unexpected Perks of Downsizing as a Retiree
7 Unexpected Perks of Downsizing as a Retiree

Downsizing your home offers many benefits, including some you may not have anticipated.

New Ways to Save Money on Insurance of Every Kind
New Ways to Save Money on Insurance of Every Kind

Tech startups are making it easy to find the best rates for all kinds of insurance policies — and get covered fast.

6 Investing Tools That Help You Diversify
6 Investing Tools That Help You Diversify

Here’s how you can lend to startup businesses, fund social causes or get in on investments once available only to the very rich.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.