SARSEP and Roth

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Posts: 47
Joined: Mon Jul 30, 2012 11:21 am

SARSEP and Roth

Post by Batousai » Tue Aug 09, 2016 9:35 pm

My employer will contributing approximately 4K to a SARSEP this year. I am looking to max my contributions this year and plan to place a couple of large late year contributions into my SARSEP and Roth IRA. My question is that I can't seem to get a clear answer on what my limits are due to SARSEPs being, well, 20 year old grandfathered plans that lots of places don't even realize exist anymore. I am going to put 5500 towards a Roth and then I'm unsure if the 18,000$ limit includes the money I put into the roth (i.e. 12500$ max) or if it is separate (23.5K total). Which is correct?

Alan S.
Posts: 8000
Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: SARSEP and Roth

Post by Alan S. » Tue Aug 09, 2016 10:24 pm

The 18,000 elective deferral limit for your SARSEP is separate from your Roth IRA limit of 5500.

If you had another job with a SIMPLE IRA, 401k, or 403b, your elective deferrals to those plans would be limited to 18,000 in total including the SARSEP, but your Roth IRA contribution is not affected. Therefore, to your question you can contribute a total of 23,500 subject to the each plan's separate limit.

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