Catch Up Provisions for those 50 years or older.
Occasionally the government gets something right. In this case, Uncle Sam realized that Americans were not saving enough for retirement and they’ve added what’s called a catch up provision for the majority of plans. If you are 50 or older you are allowed to contribute significant additional pre-tax dollars to your retirement plan. The catch up amounts are indexed to increase each year. Contribution limits for 2007 are:
| Account Type | Contribution Limit (2007) | Catch up (2007) |
| 401(k), 403(b), or 457 qualified employer plan | $15,5000 | $5,000 |
| Traditional IRA and Roth IRA | $4,000 | $1,000 |
| SIMPLE IRA | $10,500 | $2,500 |
| QRP/Keogh and SEP-IRA | 20% of net self-employment income (or 25% of compensation), up to $45,000 | None |
| Individual 401(k) | 20% of net self-employment income (or 25% of compensation) plus $15,500, up to $45,000 | $5,000 |
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