What is the maximum catch-up contribution for 401(k) plans for individuals over age 50?

The maximum catch-up contribution for 401(k) plans for individuals over age 50 is indeed $6,000. This feature allows older workers to contribute an additional amount to their retirement savings, recognizing that they may need to enhance their savings as they approach retirement age.

The Internal Revenue Service (IRS) sets these contribution limits annually, and for the year 2023, the standard contribution limit for individuals under the age of 50 is $22,500. For those 50 and older, the additional catch-up contribution of $6,000 increases their total contribution limit to $28,500.

This option supports the goal of helping older employees prepare for retirement more effectively, allowing them to save more in the final years leading up to retirement when they may have higher earnings or fewer financial responsibilities such as dependent children.