Most Americans are no longer convinced that they are financially prepared for retirement. In the 2009 Retirement Confidence Survey, only 13% of workers indicated they were “very confident” that they will have enough money for a comfortable retirement, the lowest level since the annual survey began in 1993.

Are you worried that you might have to choose between working longer or living with less than you had planned? Fortunately, if you are age 50 or older, you may have an opportunity to catch up to your retirement savings goals.

Make Up for Lost Time

The costs associated with raising a family and sending children to college can make it difficult to save for retirement. Congress recognized this when it carved out exceptions to the limits on contributions to employer-sponsored retirement plans and IRAs for people who are approaching retirement age.

In 2009, workers 50 and older can contribute an extra $5,500 to a 401(k) plan or a similar employer-sponsored retirement plan, on top of the $16,500 workers of all ages are allowed to contribute. The catch-up limit for IRAs is $1,000, on top of the standard $5,000 annual contribution limit.

Contributions to employer plans and traditional IRAs are generally not included in taxable income. So in addition to socking away more money for retirement, workers 50 and older who are taking advantage of the catch-up limits might help reduce their current tax burdens. (However, there are limits on the deductibility of IRA contributions for active participants in employer-sponsored plans, so be sure you understand the rules.)

Distributions from traditional IRAs and employer-sponsored retirement plans are taxed as ordinary income and may be subject to an additional 10% federal income tax penalty if taken prior to reaching age 59½.

Funding a comfortable retirement requires a comprehensive approach and extensive preparation. However, something as simple as increasing your contributions to tax-advantaged retirement programs can go a long way toward helping you pursue your long-term financial goals.