What is a "catch-up contribution" in retirement savings?

A "catch-up contribution" refers to the additional contribution limits set by retirement savings plans that apply specifically to individuals aged 50 and older. This provision is designed to help those nearing retirement age enhance their savings to better prepare for retirement, as they may have had less opportunity to save earlier in their careers due to various life circumstances.

By allowing individuals over 50 to contribute more than the standard limit to their retirement accounts, such as 401(k)s and IRAs, catch-up contributions provide an important mechanism for older savers to boost their retirement funds. This is particularly critical as retirement approaches and the need for adequate savings becomes more pressing.

The other options do not accurately describe catch-up contributions: depleting funds sooner and withdrawal strategies do not align with the focus on enhancing savings, while tax deductions for young savers pertain to a completely different aspect of retirement planning.