Gen X Is Turning 50: Time for Catch-Up Contributions

In 2015, the oldest members of Gen X have been turning 50, the age when they are eligible to start making annual catch-up contributions to Individual Retirement Accounts (IRAs) and retirement savings plans.

Born between 1965 and 1979, this do-it-yourself generation of former latchkey kids grew up with the original “Star Wars” and an MTV that played music videos. They’re well into adulthood now, but they could still use a nudge in investing for the future.

According to the nonprofit Transamerica Center for Retirement Studies®, the median household retirement savings of Generation X workers is an estimated $61,000. It’s a decent amount but hardly enough to take them into their 90s.

While workers typically are limited to contributing $18,000 per year in a 401(k), those turning 50 or older in 2016 can put in $6,000 more as an annual “catch-up contribution.” While younger savers may be eligible to contribute $5,500 per year to an IRA, those 50 and older can contribute an extra $1,000 to those accounts.

The IRS has details on catch-up amounts for other plans including a 403(b).

Granted, not everyone who is eligible to make a catch-up contribution can always afford to make one. Still, it’s worth giving Gen X a reminder after they turn the big 5-0.

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Mark A. Vergenes is President of MIRUS Financial partners, 110 E. King St., Lancaster; 717-509-4521 or mark@mirusfinancialpartners.com  Investment Advisor Representative offering securities and advisory services offered through Cetera Advisor Networks LLC., member FINRA/SIPC. Cetera is under separate ownership from any other named entity.

MIRUS Financial Partners nor Cetera Advisor Networks LLC. give tax or legal advice.

Transamerica Center for Retirement Studies® is a division of Transamerica Institute®, a nonprofit, private foundation that is funded by contributions from Transamerica Life Insurance Company and its affiliates and may receive funds from unaffiliated third parties. For more information, please visit www.transamericacenter.org