Employee Catch-Up Contributions

Key Takeaway

Saving enough money for a comfortable retirement is probably one of your primary financial goals. But, with so many other demands on your money, it’s easy to get off track. If you are age 50 or older and want to make up for lost time, the tax law allows you to catch up on your savings by contributing extra amounts to an employer-sponsored retirement savings plan and/or an individual retirement account (IRA).

Deferrals

Your retirement plan allows you to defer a portion of your pay to the plan. The tax law limits this benefit by capping the annual amount of salary that can be deferred. See Regulatory Briefs for current limits.

The annual limits on contributions may increase in the future. Regardless of your age, maximizing your contributions to the retirement savings plan is a tax-smart way to prepare for the future.

There is no need for you to make a separate election for catch-up contributions in your account at Alerus. If you are age 50 or older, or will be by the end of the calendar year, and would like to make catch-up contributions, please include the catch-up contribution portion in the total deferral amount elected.

You can make changes to your retirement plan at any time by logging into your account at alerusrb.com.

Special Catch-Up Contributions

FOR PARTICIPANTS AGES 60 – 63

If you are at least age 50 or will attain age 50 before the end of the calendar year, you may elect to defer
additional amounts to the plan for that year called “catch-up contributions.” The maximum catch-up
contribution amount you can make for 2024 is $7,500. In future years this may increase the cost of cost-of-living
adjustments.

A new law created a special additional catch-up contribution amount for certain participants starting in
the 2025 calendar year. To qualify for these special catch-up contributions, you must:

  • Be age 60, 61, 62, or 63 at the end of the calendar year; and
  • Have contributed the maximum deferral amount allowed for that calendar year.

If you meet the criteria above, you are allowed to make an additional $3,750 in catch-up contributions in
the 2025 calendar year, for a total amount of $11,250. This amount may also increase in future years for
cost-of-living adjustments.

In the calendar year you turn age 64, you are once again limited to the normal age 50+ catch-up
contribution limit for that calendar year and the special limit no longer applies to you.
Please note: Special rules apply if you participate in more than one plan. This document is being
provided for informational purposes only. Your official plan documents control the benefits available to
you under the plan, including as it relates to the availability of catch-up contributions. To the extent of
any inconsistency between the official plan documents and this informational document, the official plan
documents will control