Are you over the age of 50? Learn about employee catch-up contributions.

Saving enough money for a comfortable retirement is probably one of your primary financial goals. But, with so many other demands on your money, it’s easy to get off track. If you are age 50 or older and want to make up for lost time, the tax law allows you to catch up on your savings by contributing extra amounts to an employer-sponsored retirement savings plan and/or an individual retirement account (IRA).

Employee Deferrals

Your retirement plan allows you to defer a portion of your pay to the plan. The tax law limits this benefit by capping the annual amount of salary that can be deferred.

For 2020/2021, the dollar limit is $19,500, but you may contribute even more once you reach age 50. The maximum catch-up contribution for 2020/2021 is $6,500. So, if you are at least 50 years old in 2020, you can contribute a maximum deferral contribution of $26,000.

The annual limits on contributions may increase in the future. Regardless of your age, maximizing your contributions to the retirement savings plan is a tax-smart way to prepare for the future.

There is no need for you to make a separate election for catch-up contributions in your account at Alerus. If you are age 50 or older, or will be by the end of the calendar year, and would like to make catch-up contributions, please include the catch-up contribution portion in the total deferral amount elected.

You can make changes to your retirement plan at any time by logging into your account at alerusrb.com or by calling 800.795.2697. In addition, Client Service Center representatives are available Monday through Friday, 7 a.m. to 6 p.m. CT by calling 800.433.1685.