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elective deferral limit for 2003


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A public school teacher is 55 years of age and earns $81,000 per year. He has never made any elective deferrals. The employer offers three plans for elective deferrals---a 403(B), a 401(k) and a 457(B). What is the maximum elective deferral for 2003?

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Is there a reason why you didn't include the Deferred Acceleration for Retirement Amount (DAR) available in the 457(B) plan for those that have not maximized their 457 contributions in prior years? As you know this is worth another $12,000 for 2003. However, one cannot take the age 50 catchup amount ($2,000) at the same time. So is it correct to say that your total of $31,000 should be increased by $10,000 for a total deferral of $41,000?

Peace and Hope,

Joel L. Frank

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I think all references to catch-up contributions assume the plan has been amended to include that.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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  • 2 weeks later...
Guest planman

Related question: A 45 year old making $60,000 can contribute to a 401(k) and 403(B). What is the combined maximum pre tax contribution for 2003? I thought I saw $13,000 somewhere. Based on plan features/expenses, he is motivated to maximize the 401(k) contributions(i.e. $12,000) before contributing to the 403(B). Thanks.

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A participant with 15 years of service with a eligible 501©(3) employer can defer an additional 3k per year to a 403(B) plan for 5 years for a max of 15k which when combined with the 457 plan would total 27K.Contributions to a 401(k) plan would reduce the 15k contribution to the 403(B) plan but not affect the 457 contribution. See IRS pub 571 for definition of eligible employer.

mjb

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Guest Yanikoski

The $41,000 is correct, assuming that the employee is within the last three years of service prior to the normal retirement age.

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