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Know the amount you may contribute to multiple retirement plans

The most you can contribute from your wages to retirement plans is your individual contribution limit each calendar year. Although your limit is affected by the plan terms, it generally doesn’t depend on how many plans you participate in or on the type of employer sponsoring those plans.

 

If you exceed your individual contribution limit and the excess isn’t returned by April 15 (sooner for a 457(b) plan) of the next year, you could be subject to double taxation:

  • once in the year you deferred your salary and
  • again when you receive a distribution.

 

Limits

  • General limit for 2013 – you may contribute a total of $17,500 in pre-tax or designated Roth contributions to all your plans (not counting 457(b) plans).
  • Age-50 catch-up contributions – if you are age 50 or older by the end of 2013, you can contribute an additional $5,500 in total to your 401(k), 403(b) or governmental 457(b) plan.
  • 403(b) plans’ 15-year catch-up contribution – if you have at least 15 years of service with your employer, you may be able to contribute up to an additional $3,000 to your 403(b) plan.
  • 457(b) plans’ separate contribution limit – you have a separate individual contribution level for 457(b) plans, and additional catch-up amounts depend on whether the plan sponsor is a state or local government, or some other tax-exempt organization.

 

Check your plan documents for the amount you can contribute to the plan, and make sure you don’t exceed your limit.

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January 8, 2016

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