Author Topic: 401(a) and 403(b) contributions  (Read 1827 times)

gettingtoyes

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401(a) and 403(b) contributions
« on: September 24, 2016, 04:42:49 PM »
Hello,

My new employer will have the option of a 401a and 403b plan. They will put a certain amount of money into the 401a if I contribute and then can contribute money to that plan (I will be limited to their match minimum which is 4% of my salary since I will be considered a highly compensated employee). They also have a separate 403b plan that they do not contribute any money but any employee can contribute and is designed for those highly compensated employees who can't maximize the 401a contribution.

My question is: Does the 4% that I will definitely be putting in (to get the match) count towards the maximum IRS $18,000 for deferred retirement accounts? i.e. can I contribute 4% of my salary to the 401a plan and in addition put in $18k into the 403b? I've done a lot of reading and it seems like they don't count towards each other, but the retirement website at this company seems to indicate otherwise...

Mother Fussbudget

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Re: 401(a) and 403(b) contributions
« Reply #1 on: September 25, 2016, 09:53:43 PM »
Let's assume an employee making $100,000 can contribute 4% PRE-TAX to their 401a, or $4,000.
This employee then has $14,000 remaining in eligibility for PRE-TAX contributions to a 403b.

Both the 401a and 403b are TAX DEFERRED accounts - the holder will eventually need to pay taxes when the funds are spent, but that taxable-event is DEFERRED until such time as the holder withdraws funds from these accounts to pay expenses in retirement (or anytime after age 59.5). 

MDM

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Re: 401(a) and 403(b) contributions
« Reply #2 on: September 25, 2016, 11:22:55 PM »
You might read through Can you contribute $17,500 to a 401a AND 403b? - Bogleheads.org.  It's a couple of years old (thus the $17.5K instead of $18K) but otherwise relevant.  Not sure there was a definitive answer....

NinetyFour

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Re: 401(a) and 403(b) contributions
« Reply #3 on: September 26, 2016, 04:35:40 AM »
I have both of these options as well.

My 401a might be set up differently than yours.  My employer takes out about 8% of my paycheck and puts it into my 401a.  They put in another 11%.  These percentages are fixed.  I cannot contribute more or less to the 401a.

I can, in addition to my 8% to the 401a, also contribute a full $24,000 (I am over 50) to my 403b.  (I have checked and doublechecked with my HR department about this.)

I would suggest that you check with your HR department.

gettingtoyes

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Re: 401(a) and 403(b) contributions
« Reply #4 on: October 27, 2016, 02:14:07 PM »
Just to update you guys- I did talk to HR and they told me that I could only put in $18k total into the 401a and 403b accounts. In my case, I'll just put in enough to match the 401a and put the rest in the 403b, depending on the investment choices.