Glossary
Catch-Up Contribution
A catch-up contribution is an extra amount, above the normal annual limit, that people age 50 and older are allowed to contribute to retirement accounts such as 401(k)s and IRAs.
Congress created catch-ups to let late starters accelerate saving in the highest-earning years. The catch-up amounts are set separately for employer plans and IRAs and are adjusted over time; SECURE 2.0 added an enhanced catch-up window for savers in their early sixties and new rules routing some high earners' catch-ups into Roth accounts.
Why it matters in practice
The fifties and early sixties are often the decade when mortgages shrink and children launch, freeing cash flow exactly when catch-up room opens. A worker who fills both the regular and catch-up limits for the final fifteen working years can add a meaningful fraction of a retirement on its own.
Related terms: 401(k) · IRA (Individual Retirement Account) · SECURE 2.0 · Roth IRA · Compound Interest