Are you reaching your milestone birthday of turning age 50 in 2021?
If so, don’t forget about the “catch-up” provision for 401k and 403b salary deferral retirement plan contributions. For 2021, the max salary deferral into your retirement plan is $19,500. However, if you are age 50 or older, you can make an extra “catch-up” contribution into your retirement plan via your salary deferral in the amount of $6,500 annually.
No need to wait until your birthday to increase your allowed contribution amount – taxpayers qualify for the full amount of the “catch-up” contribution in the year they turn 50. Thus, you can increase your deferral amount beginning in January 2021 even if you do not turn age 50 until later in the year.
And if you turned 50 in 2020, you can take advantage of the “catch-up” deferral in the last month of the year if you missed out on this “bonus” contribution earlier in the year.