Jump to content

Participation in 403(b) and 401(k)


Guest llaplount

Recommended Posts

Guest llaplount

I have an individual who is currently contributing the maximum to a 401(k) plan through the his employer (a University). This individual is also employed by a local college that offers both a 403(b) and a 457(b) plan.

Here's the question: Can an individual who is working for two separate employers (receiving two W-2's) participate in both of their retirement plans i.e. 401(k) with the University and a 403(b) and/or a 457(b) plan with the college? If so, can he max out all of these plans (i.e. $13,000 to the 401(k), 403(b) and 457(b) plan?)?

Link to comment
Share on other sites

An employee who is over 50 can contribute an additional 3000 to the 401k/403b by salary reduction under IRC 402(g). If the employee participates in a 457b plan of a public university, an additional 3000 can be contributed to that plan as well for a max contribution of 32,000.

mjb

Link to comment
Share on other sites

Guest llaplount

Thank you for the quick response...

Just to confirm, since the employee has already maxed out his contribution of $13,000 to the 401(k), he cannot contribute to the 403(b)plan however, because he is eligible to participate in the 457(b) plan through the college, he can now contribute an additional $13,000 to the 457(b) plan and if over age 50, he can do an additional $3,000 to each the 401(k) and the 457(b) plans?

Link to comment
Share on other sites

Guest Joel Lee

And let's not forget to factor in the Deferred Acceleration for Retirement ("catch up") provision for 457(b) plans which permits the ee to increase his/her regular contribution based on not contributing the max in prior years. This DAR contribution may not exceed 100 percent of the regular max. So for 2004 one may max out the 457(b) contribution at $26,000 if he/she is using the DAR. If this hypo also has a 403(b)/401(k) the max for 2004 is $16,000 counting the age 50 catch up provision. So in this case the ee can defer $42,000 for 2004.

Under 457(b) you may not take the age 50 catch up if you are effectuating the DAR.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...