Normal and Catch Up Contributions
For 2019, the normal deferral amount allowed is $19,000 and if over age 50, there is a Catch-Up amount allowed of $6,000.
If you are nearing retirement, IRS Code allows you to make up for contributions not deferred in previous years of employment. You can “catch up” for three consecutive calendar years prior to the calendar year of your declared normal retirement age. The total amount you can catch up is determined by subtracting what you have contributed from the maximum allowed by law. The maximum amount you can defer in a single year is a combination of your regular deferral for that year and any amounts allowed but not contributed since 1979. Each calendar year’s maximum, set by the IRS, differs and is subject to change. Contact Employee Benefits for current dollar amounts and additional information.
Be sure you understand that:
- Deferred compensation is a voluntary program
- Deferred compensation funds are subject to IRS regulations
- There are strict IRS restrictions on withdrawals prior to retirement
- Benefit-eligible employees can begin or stop contributions to a deferred compensation account at any time
- You must begin receiving benefit payments no later than April 1 of the calendar year following the year you reach 70½, or the year in which you actually retire, if later
Providers and additional plan information are available from Employee Benefit Services at 954-357-6700.
