Catch-up contributions are salary deferrals (also referred to as “elective deferrals”) that employees age 50 or older can make in addition to their regular retirement plan contributions. Like regular elective deferrals, catch-up contributions can be pre-tax elective deferrals or designated Roth contributions, as chosen by the employee.
Elective deferrals are counted for both the regular annual deferral limit and the catch-up contribution limit on the basis of the calendar year. A deferral is counted for a calendar year only if the wages subject to the deferral election would otherwise have been paid or made available to the employee during the year.
The maximum amount of additional elective deferrals that you can contribute is equal to the smaller of the following amounts:
- The catch-up contribution dollar limit applicable to your plan, as described below
- Your annual compensation minus your salary deferrals that are not catch-up contributions
Following are the catch-up contribution dollar limits:
- 401(k) (not SIMPLE), 403(b), governmental 457(b) and SARSEP plans: $7,500 in 2023.
For additional information on catch-up contributions click here.