Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Contributing to Multiple 401Ks in a Single Year
Old 01-13-2013, 10:30 AM   #1
Thinks s/he gets paid by the post
Huston55's Avatar
 
Join Date: Jul 2011
Location: The Bay Area
Posts: 1,801
Contributing to Multiple 401Ks in a Single Year

I've searched old threads and the IRS site, and cannot find guidance on this, thus the questions.

I am transferring employers around mid-year this year and want to know what the contribution limits are. Seems the current annual contribution limit is $17,500 + $5,500 catch-up (I'm >55).

So, my questions are:

1. Can I make two catch-up contributions, one with each employer?
2. How is the maximum salary eligible for contributions limit applied? Is it per employer or, a single combined annual limit?
__________________

__________________
You may be whatever you resolve to be.
Huston55 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-13-2013, 10:42 AM   #2
Thinks s/he gets paid by the post
MooreBonds's Avatar
 
Join Date: Aug 2004
Location: St. Louis
Posts: 2,091
Quote:
Originally Posted by Huston55 View Post
I've searched old threads and the IRS site, and cannot find guidance on this, thus the questions.

I am transferring employers around mid-year this year and want to know what the contribution limits are. Seems the current annual contribution limit is $17,500 + $5,500 catch-up (I'm >55).

So, my questions are:

1. Can I make two catch-up contributions, one with each employer?
Catch-up and overall contribution limits are based on the $, not the # of accounts - so the same limits apply if you are contributing across 10 401(k)s, or just 1. The total contributions to all of your 401(k)s in one year cannot exceed the $17,500 base plus $5,500 catch-up. So you can put catch-up $ into both 401(k)s, as long as the total catch-up doesn't exceed $5,500 and your total base contribution doesn't exceed $17,500 when you combine both plans.

Having said that, be mindful that some employer's fiscal years end on different dates (December 15, December 31, etc.), so depending on how you set up your withholding percentage, keep in mind that the last week or two might not count for this year.

Quote:
Originally Posted by Huston55 View Post
2. How is the maximum salary eligible for contributions limit applied? Is it per employer or, a single combined annual limit?
Are you referring to how some 401(k)s limit what % of income you can contribute to a 401(k)? In that case, it all depends on what your income is at each employer. If a plan says you can contribute up to 50% of your income to the 401(k), then you can put aside up to 50% of your income into their 401(k). It doesn't matter what the other 401(k) plan says.

If you're referring to the Highly Compensated Employee provisions of some retirement plans regarding 401(k) and other retirement plan contributions, I can't tackle that off of the top of my head.
__________________

__________________
Dryer sheets Schmyer sheets
MooreBonds is offline   Reply With Quote
Old 01-13-2013, 12:01 PM   #3
Thinks s/he gets paid by the post
 
Join Date: Aug 2004
Location: Houston
Posts: 1,435
Be careful, it's up to the employee, not the two unrelated employers, to ensure you don't contribute more than the limit of $17.5+5.5k. See this page.

401(k) Resource Guide - Plan Participants - Limitation on Elective Deferrals
__________________
soupcxan is offline   Reply With Quote
Old 01-13-2013, 02:12 PM   #4
Thinks s/he gets paid by the post
growing_older's Avatar
 
Join Date: Jun 2007
Posts: 2,608
I've changed employers mid-year and can tell you from experience, the dollar limits for contributions and catchup are for YOU not for your employer. An employer may have their own rules like only X% per pay period, but you are responsible for staying under the IRS limits.

For what it's worth, most empolyers can stop your contributions at whatever hard dollar figure you specify, so if you only have $2375.50 left under the limit, tell your new employer and their payroll system will make sure you do not go over.
__________________
growing_older is offline   Reply With Quote
Old 01-13-2013, 04:20 PM   #5
Thinks s/he gets paid by the post
Huston55's Avatar
 
Join Date: Jul 2011
Location: The Bay Area
Posts: 1,801
Thx all for the answers and the link.
__________________
You may be whatever you resolve to be.
Huston55 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 11:44 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.