Have a 401K starting job that offers 403B - have ?

[QuikStang03Mach]

Hey Guys,
Im new here but have a ton of retirement questions
I currently have a traditional 401k and a roth 401k that I opened last year. This September I will be starting a job that offers a 403B with a match. By signing up for the 403B do I pretty much forgo contributing anything additional into my 401Ks for the future? Or can I have all three at the same time? If I can have all three, what are my contribution limits?
Thanks in advance!

[Martha]

This article describes in plain English how to calculate retirement contributions when you have more than one employer or are self employed and employed: Common Questions About Retirement Plans

You can make salary-deferral contributions of up to $15,500 plus an additional catch-up amount of $5,000 if you reach age 50 by Dec 31, 2008. This amount can be split among multiple retirement plans in which you participate, provided your aggregate salary-deferral contributions to all the plans do not exceed $15,500 plus catch-up. Employer contributions are not counted towards these limits and the employers do not have to coordinate their contributions.

[QuikStang03Mach]

Thank you very much!
Are salary deferral contributions ONLY characterized as pretax payroll deductions?
My 401Ks are through ING (not employer sponsored) and I don't think I can have pretax dollars contributed directly. The way I worked it last year was I just told my tax preparer how much I contributed to each plan. Would that be considered salary deferral?
Its good to know that I can contribute 15k a year. I believe IRAs are capped off at 5k for 2008 so I can contribute a maximum of 10k to my employers 403b.
If I am correct, that is very good to know.
Again, thank you very much!

[Martha]

Quote:

Originally Posted by QuikStang03Mach Thank you very much! Are salary deferral contributions ONLY characterized as pretax payroll deductions? My 401Ks are through ING (not employer sponsored) and I don't think I can have pretax dollars contributed directly. The way I worked it last year was I just told my tax preparer how much I contributed to each plan. Would that be considered salary deferral? Its good to know that I can contribute 15k a year. I believe IRAs are capped off at 5k for 2008 so I can contribute a maximum of 10k to my employers 403b. If I am correct, that is very good to know. Again, thank you very much!

I take it that the 401k at ING is a solo401k? Contributions to a solo 401k have two parts, one is salary deferral (the "employee" contribution)and the other is profit sharing (the "employer" contribution). If you have a regular 401(k) or a 403(b) through an employer your solo 401(k) limits will be reduced by any salary deferral contributions you’ve made to the regular 401(k) or 403(b). But that only affects the first $15,500 of contributions, not the profit sharing part of the contribution. The link I provided above will give you more details on how to figure it out. Your profit sharing for your solo 401k will be limited to 20 or 25% of the self employment income, up to a max of $46,000 for 2008 for all contributions to the solo 401k (plus $5000 if you are older than 50).

[QuikStang03Mach]

Quote:

Originally Posted by Martha I take it that the 401k at ING is a solo401k? Contributions to a solo 401k have two parts, one is salary deferral (the "employee" contribution)and the other is profit sharing (the "employer" contribution). If you have a regular 401(k) or a 403(b) through an employer your solo 401(k) limits will be reduced by any salary deferral contributions you’ve made to the regular 401(k) or 403(b). But that only affects the first $15,500 of contributions, not the profit sharing part of the contribution. The link I provided above will give you more details on how to figure it out. Your profit sharing for your solo 401k will be limited to 20 or 25% of the self employment income, up to a max of $46,000 for 2008 for all contributions to the solo 401k (plus $5000 if you are older than 50).

I think im confused now, because I had said I have a 401k - I dont.
My ING IRAs were opened by me and I am the only one who contributes to them. My question about salary deferral is in regards to does the employer have to put it in, or can my contributions be considered salary deferred?
I think iv figured it out, 2008 for example, that if I max out my IRA contributions in (which is 5k) I can only contribute 10k to my new 403b.

I don't have a 401k(sorry, my mistake), only IRAs through ING. My new job offers a 403b.

[Martha]

OK, IRAs are treated differently. Your IRA will not effect how much you can contribute to the 403(b). So, you can do the $15,500 to the 403(b). However, the 403(b) will effect whether you can make a tax deductible contribution to an IRA. Because you are covered by an employer retirement plan, you no longer can make a tax deductible contribution to a traditional IRA. However, if your spouse isn't covered by a retirement plan, you might be able to contribute to a deductible IRA for her, depending on your family's income. Also depending on your family's income, you might be able to contribute to a Roth IRA.

Sorry if I have contributed to your confusion.

[QuikStang03Mach]

No, you have not contributed to my confusion - its all me

I do kind of remember reading that a while back. Feels like im shooting myself in the foot by taking the 403b as opposed to me investing in traditional IRAs (because its one or the other).
Do you know if I could still contribute to the roth IRA with a 403b?

[Martha]

You can contribute to a Roth if you do no exceed the (2008 ) income limits:

• Single: If your income tax filing status is single, your Roth IRA contribution limit is reduced when your adjusted gross income is more than $101,000. Your contribution limit is zero when your adjusted gross income reaches $116,000.
• Married Filing Jointly:
  Married persons filing jointly will have a reduced contribution limit for each persons Roth IRA if their adjusted gross income exceeds $159,000. If their adjusted gross income reaches $169,000, each persons contribution limit is zero.