Simple IRA and 401k in Same Calendar Year – Contribution Limit?
My daughter currently working for a company with a Simple IRA. She contributes the “max per pay check” and probably has $6,000 of her yearly max in by March 30th the end of 1Q2019. She is seriously thinking of taking a new job at a company with a 401k program and would be there in about 2 weeks. I am pretty sure there will be a “waiting period” before she can start contribution to the new company 401k (?) but since 401k have significantly higher contribution limits. HOW WILL THE 2019 COMBINED CONTRIBUTION LIMIT BE CALCULATED? The 2019 limits are: Simple IRA $13,000 and 401k $19,000 Alan TIA!
Permalink Submitted by Alan - IRA critic on Wed, 2019-04-03 18:13
Each plan is subject to it’s individual limits, but there is an overall limit of 19,000 (elective deferral limit) for both combined. Therefore, if she has contributed 6000 to the SIMPLE IRA, she must stop her 401k contributions this year at 13,000 to avoid breaching the overall limit. If she is 50, the catchup limits much also be determined.