Are 401k contribution limits prorated the year I retire? If I work less than 12 months, does the 19,500 limit need to be prorated?
No. The limit is for the year, not the time you work.
Catch-up contributions for those age 50 and over
If permitted by the 401(k) plan, participants age 50 or over at the end of the calendar year can also make catch-up contributions. You may contribute additional elective salary deferrals of:
- $6,500 in 2021 and 2020 and $6,000 in 2019 - 2015 to traditional and safe harbor 401(k) plans
- $3,000 in 2021 - 2015 to SIMPLE 401(k) plans
- These amounts are subject to cost-of-living adjustments
You don’t need to be “behind” in your plan contributions in order to be eligible to make these additional elective deferrals.