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457(b) and 401(k) contributions
Old 08-03-2008, 12:46 AM   #1
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457(b) and 401(k) contributions

This is a pretty dumb question, and I think I know the answer, but just wanted to double-check with the board here.

In May, I switched careers from the public sector to private. Up to the point of my resignation, I had already contributed the max into my 457(b) plan ($15.5K). My new company has a 401(k) plan. My understanding is that I can contribute another $15.5K of tax deferred money into the 401(k) plan.

I checked with online sources, and they all seem to suggest that's correct. (ie. 457(b)wise : 457(b) FAQs. "
Can an employee contribute to a 457(b) and a 403(b)?") However, I have not found the answer on the IRS website. There is a small lingering doubt in my mind, since I haven't heard it directly from the horse's mouth, so to speak.

Any knowledge/personal experience is greatly appreciated. Thank you!

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Old 08-03-2008, 08:05 AM   #2
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Yes, you can contribute to BOTH a 403(b) and 457(k) during the same year.
If you're an old man, you can contribute a maximum of $20,500 to each entity for a total of $41,000 pretax. A good way to save money, especially if you're in a high tax bracket.

One hopes these programs continue and the maximum contributions are raised to more realistic levels.

Consult with only myself as your adviser or representative. My thoughts should be construed as investment advice of the highest caliber. Past performance is but a pale shadow and guarantee of even greater results in the future.
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Old 08-03-2008, 08:08 AM   #3
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Thanks! That is good to hear.

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Old 08-03-2008, 09:38 AM   #4
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I agree with Barbarus and add that this rule only applies to 457 plans. Other plans, like multiple 401ks or 403bs, will have their salary deferral contributions limited to a total of $15,500 plus $5000 if 50 and over. The rule for 457 plans is different because your own contributions are not considered to be salary deferral contributions.

No more lawyer stuff, no more political stuff, so no more CYA

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Old 08-03-2008, 05:27 PM   #5
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Great! Now the hard part: coming up with $15.5K to put away.

Thanks, Martha.
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