frugal

Senior discounts for the 50-plus crowd

Retirement savings
Retirement savings © Ryan R Fox/Shutterstock.com

Starting at age 50, you can make extra tax-deferred contributions to your retirement plan above the ordinary IRS annual limits. That's a perk that helps you both now and later.

In 2014, the regular contribution limit for a 401(k) is $17,500. If your employer allows the extra so-called catch-up contributions, you can defer an additional $5,500 once you reach 50.

"If you are 50 years old … and you do that for 15 years and you earn 8 percent on your money ... you'll accumulate $624,499," says CFP professional Karl Byrd, vice president of Security Ballew Wealth Management in Jackson, Mississippi.

Traditional and Roth individual retirement account owners can put away an additional $1,000 above the $5,500 limit for 2014.

It's up to you and your financial adviser to decide whether catch-up contributions will help you reach your retirement goals.

"Each client's financial circumstances are different with respect to income, assets, liabilities and taxes," says CFP professional John Towles, senior vice president and client development officer at Paragon Commercial Bank in Raleigh, North Carolina. "I think a good approach is to consider the client's whole financial picture first, including when they plan to retire and how much income they will need during retirement."

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