403(b), 457, SEP IRA, Roth IRA

[Martha]

OK, I am Galting but I think that I am getting somewhere. Reading section 415 I read it as the need to only aggregate contributions made by one employer. Just like 402g aggregates all your employee contributions. But it looks like there is yet another rule in section 415 which provides that the 403(b) participant's employer includes any business of which you have more than 50% control. That provision seems to require the SEP-IRA 415 maximum be combined with the 403(b) because both plans are deemed maintained by the same employer.

So, back to my summary, this is now where I am coming down:

1. You have a job. You do not own any interest in the employer. The employer has a 401k. You max out your contribution at 16,500. The employer maxes out the match and profit sharing so the total contributions for the year are $49,000.

2. You have a side business as a solo proprietor. Your profits are $400,000. You max out a SEP and contribute $49,000. Now you have a total for the year contributed to retirement plans of $98,000.

3. You take another job that has a 403b. No contributions can be made because you maxed out the SEP.

Please people, don't take any of this as legal advice.

One last Galt and a narcissistic self-quote.

Fairmark Forum :: Retirement Savings and Benefits :: Sep Ira contribution and active participant
Fairmark Forum :: Retirement Savings and Benefits :: Max retirement contribution/two jobs

These Fairmark threads are consistent with my analysis. I should have gone there first!

 

[target2019]

OK, suppose you have no 401(k), but you got that 403(b) and a side job.

You contribute $16,500 to your 403(b) and your employer matches $2,500 for a total of $19,000. I guess that means that your SEP-IRA can get $30,000 if your side job profits allow it?

And you still can contribute $16,500 to the 457 regardless.

I wouldn't call it a side job, but be consistent in calling it self-employment.

In 2008 Proseries, I put 15,500 into a 403(b) instead of 401(k). It has no effect on the max of 46K for the SEP-IRA. You would have needed 230K of profit for that 46K.

The SEP-IRA faq at IRS site has an email and telephone number.

 

[DblDoc]

OK, now my head hurts...

I think I'll stick with keeping within the $49k and call it done. I don't make enough as a locums to contribute much beyond that anyways.

DD

PS thanks to Martha and others for pondering all this.

 

[Martha]

I wouldn't call it a side job, but be consistent in calling it self-employment.

In 2008 Proseries, I put 15,500 into a 403(b) instead of 401(k). It has no effect on the max of 46K for the SEP-IRA. You would have needed 230K of profit for that 46K.

The SEP-IRA faq at IRS site has an email and telephone number.

I get irritated at the IRS questions and answers because they are so literal and do not identify the exceptions and limitations. This one is a prime example.

Does the program quiz you about ownership interest in the various entities which contribute retirement money? If not, it will give the wrong answer. From what I have now read, and supported at least by the Fairmark comments, I think that the SEP for the self employed and the 403b have to be aggregated and can't exceed a total of $49,000. This is also consistent with what the doctors seem to be doing as they are a group that often participates in a 403b.