iStock_000001433984LargeFrom the time you started out in your career, you probably heard a lot of advice about saving for retirement. But many people in their 20s and 30s are busy raising children, paying for their college educations, buying their first homes, and so on. We often overlook retirement savings until our 40s and 50s, and then panic sets in: Will I be able to save enough for retirement now? If you’ve just realized your current savings won’t be sufficient to carry you through your retirement years, you aren’t alone. This is a common scenario, and the good luck is that you still have time to catch up on retirement planning. If you’re aged 50 or older, you can make up for lost time by taking advantage of retirement plan catch-up contribution limits. For 2013 and 2014, the catch-up contribution limit for IRAs is an additional $1,000 dollars on top of your usual contributions. As for employer-sponsored plans, you can make catch-up contributions of up to $5,500 to the following plans:

  • 401(k) – except SIMPLE 401(k)
  • 403(b)
  • SARSEP
  • governmental 457(b)

Only two rules apply: You must make your catch-up contribution before the end of the year, and you must make the contribution through elective deferrals. While these extra contributions may not seem like much money now, keep in mind the effect of compounding interest. Even an extra $1,000 dollars per year, over the next 10 to 15 years, can add up to a nice chunk of change once you consider the effects of accumulating interest. If you’re concerned that even these catch-up contributions won’t help you save enough for retirement, talk to your insurance professional or financial advisor. He or she can suggest other ways to be sure you have enough money stashed away before you need to quit working. http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-Catch-Up-Contributions This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional.  The statements and opinions expressed are those of the author and are subject to change at any time.  All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only.  It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. 13432 – 2014/5/29