How to best catch up with retirement savings after age 50

I’m 60 years old, and a few years ago I started using the “catch-up over 50” option to contribute extra in my retirement account. Can I add more retroactively? My husband has no workplace retirement plan. Is there a way for him to make catch-up contributions?

You can’t make retroactive retirement account contributions; but the annual contribution deadline is the filing date for that year’s tax return. In other words, you have until April 15, 2017 to make a 2016 contribution. If your husband is at least 50 years old, he can make catch-up contributions to an IRA and/or a Roth IRA, or if he’s self-employed, to a SEP-IRA or individual 401(k).

The legal 2016 limit for 401(k) contributions is $18,000; but 401(k) plans can set a lower limit, and many do. People 50 or older can save an additional $6,000 as a “catch-up” 401(k) contribution. An individual’s total 2016 traditional and Roth IRA contributions can’t exceed whichever is greater, $5,500 or $6,500 if he’s at least 50 years old.

One caveat: Your husband’s IRA contributions may not be tax-deductible. If you don’t have a workplace retirement plan and you file taxes jointly with a spouse who does have a workplace plan, when your combined income is more than $184,000 but less than $194,000, your 2016 IRA contributions are only partially deductible. If your combined income exceeds $194,000, your IRA contributions aren’t deductible.

After age 70 1⁄2, you can contribute to your employer’s 401(k) if you still work, but you can no longer put money into an IRA. However, you can contribute to a Roth IRA as long as you have employment income, regardless of age.

THE BOTTOM LINE It’s smart to review your retirement savings options periodically because the contribution limits and eligibility rules can depend on your age, income, marital status, and employment situation.

WEBSITES WITH MORE INFORMATION

nwsdy.li/401k

nwsdy.li/iras