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Bob Powell: Do you have a section 457 retirement plan at work? Are you behind on savings? Well, if that's the case, you should explore every avenue to shore up your retirement account, including catch-up contributions to help generate extra savings for your future. In a recent article in Retirement Daily, Snezana Zlatar Senior Vice President at Prudential Retirement, explained something called the last three year catch-up. That special type of catch up may allow participants to make additional elective contributions only during the three years before they reach normal retirement age. The last three year catch-up allows for double the dollar amount. That would be $38,000 for 2019 or the basic annual amount, $19,000 for 2019 plus amounts allow but not contributed in prior years in which the participant was eligible to contribute. If a participant is eligible for both age 50 catch-up and the last three year catch-up contribution in a year, the rule that allows for the greater catch-up contribution applies. Bottom line, if you have a 457 plan at work, you should take advantage of this special catch-up if you can.

Saving for retirement isn't easy.That's especially true if you're raising a family and trying to save for your children's college education.

Uncle Sam knows this. That's why your favorite uncle will let you save a little bit more for retirement once you turn 50. It's called the catch-up contribution. Individuals who are age 50 or over at the end of the calendar year can make annual catch-up contributions up to $6,000 in 2019 in the following plans: 401(k) (other than a SIMPLE 401(k)), 403(b), SARSEP, and governmental 457(b).

If you have a 457 plan it gets even better.

But first...

What is a 457 Plan?

457 plans are non-qualified, tax-advantaged, deferred compensation retirement plans offered by state, local government and some nonprofit employers.

Now the Good News

So, here's how it gets even better. Special 457(b) catch-up contributions, if permitted by the plan, allow a participant for three years prior to the normal retirement age to contribute the lesser of: twice the annual limit ($38,000 in 2019) or the basic annual limit plus the amount of the basic limit not used in prior years.

Yes, we know it sounds a bit confusing. And that's why you might need a subscription to Retirement Daily, which can help you understand when and how to take advantage of the double catch-up provision. 

Get more information and sign up for a free trial subscription to TheStreet's Retirement Daily.

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