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That extra amount could mean having over$100 extra per month in your retirement budgetfor over 12 years.
Granted, taxes might reduce that, but investment gains might also increase it.
The base catch-up changes periodically, but not annually.
In 2015, the catch-up was $6,000.
In 2020, it increased to $6,500.
In 2023, it was raised once again to $7,500.
If you have both options, consider what works best based on your budget.
If cash flow is tight, doing more pre-tax catchup is recommended.
It is important that pre-retirees consider their final few years of employment as a dress rehearsal for retirement.
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