Over 50? Take advantage of catch-up contributions

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(MoneyWatch) If you are celebrating your 50th birthday (or a birthday over age 50) this year, then you have some catching up to do. By that I mean if you're over 50 any time in 2013, you can make additional contributions all year into certain tax advantaged savings plans and accounts.

If you could use some tax savings, your savings could use a boost, and you're 50 or older, then you'll want to take advantage of these opportunities to catch up on your tax advantaged savings.

Catch-ups for 401(k)s

In 2013, people can contribute $17,500 annually into their employer sponsored 401(k) type retirement plans. But if you're over 50 at any time in 2013 (even if you turn 50 on Dec. 31, 2013), you can contribute an additional $5,500 (which remains unchanged from 2012 limits) for a total contribution of $23,000.

Catch-ups for Simple IRAs

Some folks who are self employed still use Simple IRA plans. If you are under age 50, the contribution limit to those is $12,000. If you are age 50 and above in 2013, you can contribute an additional $2,500 to a Simple IRA for a total contribution of $14,500.

Catch-ups for IRAs

There are also additional savings opportunities for people who contribute to IRAs. Those who have either a traditional IRA or a Roth IRA and are age 50 and above also can boost their savings. For folks under age 50, the annual limit in 2013 on contributions is $5,500. But if you are age 50 and above in 2013, the annual contribution limit is $6,500, which means that an additional contribution of $1,000 is allowed.

Catch-ups for HSAs

Folks who are enrolled in high deductible health plans have a special savings opportunity. These people can set aside pre-tax money into a health savings account, or HSA. Money from these special accounts can later be withdrawn tax-free when used for qualified medical expenses. The annual contribution limit to an HSA for folks with single medical coverage is $3,250. The annual contribution limit is $6,450 for people covered under qualifying family medical plans. But if you are age 55 or above in 2013, you can contribute $4,250 to an HSA for singles and $7,450 for families, or you can contribute an additional $1,000 per year.

  • Ray Martin

    View all articles by Ray Martin on CBS MoneyWatch»
    Ray Martin has been a practicing financial advisor since 1986, providing financial guidance and advice to individuals. He has appeared regularly as a contributor on the CBS Early Show, CBS NewsPath, as a columnist on CBS Moneywatch.com and on NBC-TV's morning newscast TODAY. He has also appeared on the Oprah Winfrey Show and is the author of two books.

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