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.
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.
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