Taking advantage of catch-up contributions (DESCRIPTION) Text, U.S. Wealth Management U.S. Bank. Investment products and services are: NOT A DEPOSIT, NOT FDIC INSURED, MAY LOSE VALUE, NOT BANK GUARANTEED, NOT INSURED BY FEDERAL GOVERNMENT AGENCY. Taking advantage of catch-up contributions An animation depicts a woman with her arm around a man. (SPEECH) If you're nearing retirement, you may be concerned about whether your retirement savings goals are within reach. If you're age 50 and older, you can take advantage of catch up contributions to add to your retirement accounts. (DESCRIPTION) Green rises inside a safe (SPEECH) Later in life, there's a greater sense of urgency to make retirement saving a bigger priority. (DESCRIPTION) Sun, moon and clouds on a clock (SPEECH) The clock is ticking and you need to make the most of your opportunity. (DESCRIPTION) A needle moves on a graphic next to a female graduate, a house, stacks of cash. (SPEECH) You also may have reached a stage in life where some of your expenses, like helping a child through college or paying off a mortgage, are no longer a strain on your budget. If so, it may be a good time to dedicate more dollars toward your retirement. (DESCRIPTION) Retirement savings plan, Simple IRA, Roth IRA, 457, 403 (b), 401 (k) (SPEECH) Investing in tax advantaged retirement accounts, such as a workplace retirement savings plan or IRA, are the primary ways most of us save for retirement. Because these vehicles offer significant tax benefits, such as tax deferred growth of investment earnings, there are annual limits to how much you can save in these accounts. If you're 50 and older, you have the opportunity to make larger annual contributions to these types of accounts. If you're 55 and older, you can also make larger contributions to health savings accounts, also known as HSAs. Can catch up contributions make a meaningful difference? (DESCRIPTION) On the Y-axis of a graph, $0, $250,000, $500,000, $1,000,000. On the X-axis, 50, 52, 54, 56, 60, 62, 64, 66. A green line represents Standard contributions, A red line represents Catch-up contributions (SPEECH) Consider this example of a 50-year-old employee who planned to max out contributions to a workplace retirement plan at the standard contribution limit. (DESCRIPTION) A green line starts at 0 and climbs to just under $750,000. (SPEECH) If that person instead takes full advantage of catch up contributions until retirement after age 67, the amount accumulated in the retirement savings plan will be significantly greater. (DESCRIPTION) The red line climbs to just under $1,000,000 (SPEECH) That can represent a meaningful increase in retirement income. (DESCRIPTION) Text in a table, Gross income, Retirement savings, Tax bill, Net income (SPEECH) Catch up contributions can also help lower your taxes. Additional pre-tax contributions to your workplace savings plan or tax deductible contributions to an IRA can mean less taxable income. The more you add, the lower the tax bill could be in the year the contributions are made or attributed. (DESCRIPTION) A man and woman with their arms around each other. (SPEECH) If you're approaching retirement, take a closer look at where you stand with your retirement savings and your financial situation. Then determine if taking advantage of the opportunity offered through catch up contributions in your retirement accounts is right for you. (DESCRIPTION) Text, U.S. Wealth Management U.S. Bank. Investment products and services are: NOT A DEPOSIT, NOT FDIC INSURED, MAY LOSE VALUE, NOT BANK GUARANTEED, NOT INSURED BY FEDERAL GOVERNMENT AGENCY. U.S. Wealth Management - U.S. Bank is a marketing logo for U.S. Bank. U.S. Bank and its representatives do not provide tax or legal advice. Your tax and financial situation is unique. You should consult your text and/or legal advisor for advice and information concerning your particular situation. The information provided represents the opinion of U.S. Bank. This is not intended to be a forecast of future events or guarantee of future results. Copyright 2021 U.S. Bank.