Catch-Up Contributions: a Happy 50th Birthday, my friends!

August 26, 2021

I personally can’t believe it, and certainly don’t feel it, but June 11, 2021 was a milestone day for me: my 50th birthday!

A 50th birthday can mean different things to people – from happiness to sadness, excitement to disappointment, a time of reflection or a time of opportunity – the list goes on… I know some that fear getting older. But if you have your health, I consider age to be just a number. For me, I envision it in golf terms. That is, I’m 50 and “making the turn” – it was a solid front nine, I’m at the halfway house now, and about to crush the back nine!

I know others “making the turn” may not be quite as optimistic. So let me cheer you up with a birthday gift: the CATCH-UP CONTRIBUTION. Created in 2001 by the Economic Growth & Tax Relief Reconciliation Act (EGTRRA), the Catch-up Contribution is a type of retirement savings contribution that allows people aged 50 or older to make additional contributions to their retirement accounts. Thus you can plow more money into tax-advantaged accounts to get that retirement pot bigger and bigger to enable you to achieve your long-term financial goals. Recall that the key to financial independence is through SAVING & INVESTING – well, the Catch-up Contribution is another great “club in the bag” to make it happen!

For 2021, here are the additional CATCH-UP contributions us lucky 50+ yr olds can make!


 *Catch-ups permitted for workers aged 50 years and older.



Love to see that compounding at work! This table shows the difference of maxing a 401k at the standard max $19.5K limit versus maxing a 401k at $26K thus with catch-up contributions, using a $250K starting point for a 50 yr old and running it to age 70 at 6% yearly returns. Over 20 years, one can see that maxing out including catch-up contributions can really make a significant increase in wealth!

And here’s the frosting on your cake: one can start making these catch-up contributions at any time during the calendar year in which you will turn 50, even if you haven’t reached your milestone yet. Heck, I increased my contributions the first week of January this year to take advantage!

So to all of you other 1971 or early 70s babies: We’re not old, we’re just making the turn and about to have the best nine ever! Start by getting that IRA or 401k maxed out, taking advantage of the CATCH-UP CONTRIBUTION rule so that when we are celebrating our next couple of milestones at 60 and 70, we’re smiling all the way to the bank….in our golf cart, of course! Fore!


Detterbeck Wealth Management is a fee-only financial planning / wealth management company with offices located in Palatine, IL (Chicago area) and Charleston, SC areas serving clients locally and across the country. To contact us about setting up an appointment, please see our contact us page