Maxing SEP, 403b, and 457b
Dear Alan,
I’m just confirming that I’m correct below in my assumptions on what “Gary” can contribute to multiple retirement plans when his business as a sole proprietor has generated $94K in net income in addition to his income as a W2 employee.
1. Gary 403b salary deferral…………………$18,000.00
2. Gary 403b employer contribution………$22,315.62 (confirmed by his Dec paystub)
3. Gary SEP plan………………………………..$12,684.38 (solving for the difference between $53,000 and #1 plus #2)
Total………………………………………………….$53,000.00 (limit on total contributions to both SEP and 403b plans)
His 403b catch-up contribution ($6,000) and his 457(b) salary deferral ($18,000) are allowed in addition to the $53,000 total.
Thank you,
Chris
Permalink Submitted by Alan - IRA critic on Fri, 2016-03-18 23:27
Chris, above is correct. But odd that item 2 would be that large. Is client sure that the figure for item 2 does not include item 1. Technically, salary deferrals are employer contributions even though the employee elects the amount.
Permalink Submitted by Christopher Combs on Mon, 2016-03-21 15:15
Alan,Thanks for the response as always. Yes, the employer contribution at this institution is quite generous (13.2% on all salary above $59,750) which is why the figure is so high. Golden handcuffs.Chris