February 2005
Catch-Up Contributions:
A special provision does need to be made in order to help this plan get off the ground. This plan would be great if every American were still young and just beginning a career. The reality of the situation is that we are all at different points in our lives, and middle aged workers would be unfairly penalized at the inception of this plan. If a person who was 45 years old wanted to participate in this newly formed program, he or she would have only $32,161.67 in his or her account by the time he or she reached age 65. Therefore, it is advantageous and necessary to create a catch-up provision. However, this plan is designed to supplement Social Security and not to provide tax-free wealth. Therefore, catch-up contributions will not be tax-deductible.
Lifetime contributions to this program will be limited to a maximum of $50,000. However, this maximum contribution allowance could potentially be increased after the first 10 years of program existence in order to better reflect participation levels. Nevertheless, such a course of action is not recommended at this time.
The maximum allowable lifetime catch-up contributions for each individual person will be based on that person’s age at the time of program inception. It will use a reverse scale that assumes maximum account contributions for a working person are reached at age 65.
| Age at Program Inception: 65+ | Maximum Lifetime Catch-up Contributions: $50,000.00 |
| Age at Program Inception: 64 | Maximum Lifetime Catch-up Contributions: $49,000.00 |
| Age at Program Inception: 63 | Maximum Lifetime Catch-up Contributions: $48,000.00 |
| Age at Program Inception: 62 | Maximum Lifetime Catch-up Contributions: $47,000.00 |
| Age at Program Inception: 61 | Maximum Lifetime Catch-up Contributions: $46,000.00 |
| Age at Program Inception: 60 | Maximum Lifetime Catch-up Contributions: $45,000.00 |
| Age at Program Inception: 59 | Maximum Lifetime Catch-up Contributions: $44,000.00 |
| Age at Program Inception: 58 | Maximum Lifetime Catch-up Contributions: $43,000.00 |
| Age at Program Inception: 57 | Maximum Lifetime Catch-up Contributions: $42,000.00 |
| Age at Program Inception: 56 | Maximum Lifetime Catch-up Contributions: $41,000.00 |
| Age at Program Inception: 55 | Maximum Lifetime Catch-up Contributions: $40,000.00 |
| Age at Program Inception: 54 | Maximum Lifetime Catch-up Contributions: $39,000.00 |
| Age at Program Inception: 53 | Maximum Lifetime Catch-up Contributions: $38,000.00 |
| Age at Program Inception: 52 | Maximum Lifetime Catch-up Contributions: $37,000.00 |
| Age at Program Inception: 51 | Maximum Lifetime Catch-up Contributions: $36,000.00 |
| Age at Program Inception: 50 | Maximum Lifetime Catch-up Contributions: $35,000.00 |
| Age at Program Inception: 49 | Maximum Lifetime Catch-up Contributions: $34,000.00 |
| Age at Program Inception: 48 | Maximum Lifetime Catch-up Contributions: $33,000.00 |
| Age at Program Inception: 47 | Maximum Lifetime Catch-up Contributions: $32,000.00 |
| Age at Program Inception: 46 | Maximum Lifetime Catch-up Contributions: $31,000.00 |
| Age at Program Inception: 45 | Maximum Lifetime Catch-up Contributions: $30,000.00 |
| Age at Program Inception: 44 | Maximum Lifetime Catch-up Contributions: $29,000.00 |
| Age at Program Inception: 43 | Maximum Lifetime Catch-up Contributions: $28,000.00 |
| Age at Program Inception: 42 | Maximum Lifetime Catch-up Contributions: $27,000.00 |
| Age at Program Inception: 41 | Maximum Lifetime Catch-up Contributions: $26,000.00 |
| Age at Program Inception: 40 | Maximum Lifetime Catch-up Contributions: $25,000.00 |
| Age at Program Inception: 39 | Maximum Lifetime Catch-up Contributions: $24,000.00 |
| Age at Program Inception: 38 | Maximum Lifetime Catch-up Contributions: $23,000.00 |
| Age at Program Inception: 37 | Maximum Lifetime Catch-up Contributions: $22,000.00 |
| Age at Program Inception: 36 | Maximum Lifetime Catch-up Contributions: $21,000.00 |
| Age at Program Inception: 35 | Maximum Lifetime Catch-up Contributions: $20,000.00 |
| Age at Program Inception: 34 | Maximum Lifetime Catch-up Contributions: $19,000.00 |
| Age at Program Inception: 33 | Maximum Lifetime Catch-up Contributions: $18,000.00 |
| Age at Program Inception: 32 | Maximum Lifetime Catch-up Contributions: $17,000.00 |
| Age at Program Inception: 31 | Maximum Lifetime Catch-up Contributions: $16,000.00 |
| Age at Program Inception: 30 | Maximum Lifetime Catch-up Contributions: $15,000.00 |
| Age at Program Inception: 29 | Maximum Lifetime Catch-up Contributions: $14,000.00 |
| Age at Program Inception: 28 | Maximum Lifetime Catch-up Contributions: $13,000.00 |
| Age at Program Inception: 27 | Maximum Lifetime Catch-up Contributions: $12,000.00 |
| Age at Program Inception: 26 | Maximum Lifetime Catch-up Contributions: $11,000.00 |
| Age at Program Inception: 25 | Maximum Lifetime Catch-up Contributions: $10,000.00 |
| Age at Program Inception: 24 | Maximum Lifetime Catch-up Contributions: $9,000.00 |
| Age at Program Inception: 23 | Maximum Lifetime Catch-up Contributions: $8,000.00 |
| Age at Program Inception: 22 | Maximum Lifetime Catch-up Contributions: $7,000.00 |
| Age at Program Inception: 21 | Maximum Lifetime Catch-up Contributions: $6,000.00 |
| Age at Program Inception: 20 | Maximum Lifetime Catch-up Contributions: $5,000.00 |
| Age at Program Inception: 19 | Maximum Lifetime Catch-up Contributions: $4,000.00 |
| Age at Program Inception: 18 | Maximum Lifetime Catch-up Contributions: $3,000.00 |
| Age at Program Inception: 17 | Maximum Lifetime Catch-up Contributions: $2,000.00 |
| Age at Program Inception: 16 | Maximum Lifetime Catch-up Contributions: $1,000.00 |
| Age at Program Inception: 0-15 | Maximum Lifetime Catch-up Contributions: $0.00 |
Coincidentally, the current minimum unrestricted employment age in America is 16. Therefore, every American worker will have completely fair and equal access to this program. These catch-up contributions may be made in a lump sum or in incremental amounts over a worker’s lifetime. However, the first $1,000 of a contribution in any given year will be tax-deductible. Therefore, a catch-up contribution will be deemed any amount in excess of the annual allowed contribution of $1,000.
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