Limit on combined retirement contribution?

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sman09
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Limit on combined retirement contribution?

Post by sman09 » Wed Jul 10, 2019 12:33 pm

Dear BH

Reading online i find that per employee(individual), the combined employer+employee contribution towards retirement (401/403/457) should not exceed $56,000 in a year.

Is there a similar limit on how much a couple (filing returns jointly) invest in retirement accounts? If so, does that limit also include employer contribution? We were considering pre-tax allocation in our respective employer provided plans and are in our 30s, in case that matters to help with this information.

Thanks.

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Tamarind
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Re: Limit on combined retirement contribution?

Post by Tamarind » Wed Jul 10, 2019 12:47 pm

Retirement account contribution limits are always individual. There's one exception I can think of, which is that joint MAGI of the couple determines whether both spouses can contribute directly to a Roth IRA.

Thesaints
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Re: Limit on combined retirement contribution?

Post by Thesaints » Wed Jul 10, 2019 1:00 pm

I don't think 457 is subject to that limit.

retiredjg
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Re: Limit on combined retirement contribution?

Post by retiredjg » Wed Jul 10, 2019 1:05 pm

sman09 wrote:
Wed Jul 10, 2019 12:33 pm
Reading online i find that per employee(individual), the combined employer+employee contribution towards retirement (401/403/457) should not exceed $56,000 in a year.
This is not completely correct, but that does not impact your real question.

Is there a similar limit on how much a couple (filing returns jointly) invest in retirement accounts?

No. Each person's limits are individual.

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sman09
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Re: Limit on combined retirement contribution?

Post by sman09 » Wed Jul 10, 2019 1:19 pm

Thank you Tamarind, Thesaints and retiredjg for the input.

retiredjg wrote:
Wed Jul 10, 2019 1:05 pm
Is there a similar limit on how much a couple (filing returns jointly) invest in retirement accounts?

No. Each person's limits are individual.

Good to know! So, it appears i could technically contribute $19,000 each to my 403 and 457 plans and my spouse can still contribute $19,000 to their 401k plan although we will file returns jointly. This is without having to consider how much the employer match was during the year, correct?


Just to add:
retiredjg wrote:
Wed Jul 10, 2019 1:05 pm
sman09 wrote:
Wed Jul 10, 2019 12:33 pm
Reading online i find that per employee(individual), the combined employer+employee contribution towards retirement (401/403/457) should not exceed $56,000 in a year.
This is not completely correct, but that does not impact your real question.
This is one of the sources i saw this information from: https://www.shrm.org/resourcesandtools/ ... imits.aspx
'Catch-up' contribution for those 50 and older stays at $6,000, while contribution limit from all sources hits $56,000
However, i agree it's tangential to my question! :)

retiredjg
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Re: Limit on combined retirement contribution?

Post by retiredjg » Wed Jul 10, 2019 2:10 pm

sman09 wrote:
Wed Jul 10, 2019 1:19 pm
So, it appears i could technically contribute $19,000 each to my 403 and 457 plans and my spouse can still contribute $19,000 to their 401k plan although we will file returns jointly. This is without having to consider how much the employer match was during the year, correct?
That is correct. However, unless some of those contributions are Roth, it is possible you are putting too much into tax-deferral by filling all 3 plans year after year. I think many might disagree, but that is an opinion you might want to consider.

There can also be problems with non-governmental 457b plans. If that is what you have, you should know that before using it.

retiredjg
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Re: Limit on combined retirement contribution?

Post by retiredjg » Wed Jul 10, 2019 2:21 pm

sman09 wrote:
Wed Jul 10, 2019 1:19 pm
retiredjg wrote:
Wed Jul 10, 2019 1:05 pm
sman09 wrote:
Wed Jul 10, 2019 12:33 pm
Reading online i find that per employee(individual), the combined employer+employee contribution towards retirement (401/403/457) should not exceed $56,000 in a year.
This is not completely correct, but that does not impact your real question.
This is one of the sources i saw this information from: https://www.shrm.org/resourcesandtools/ ... imits.aspx
Perhaps you were speaking of just one employer but did not say that specifically. My answer did not assume 1 employer. Also, I too think the 457 is completely separate and I'm not even sure there is a $56k limit on 457 plans.

Thesaints
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Re: Limit on combined retirement contribution?

Post by Thesaints » Wed Jul 10, 2019 3:34 pm

retiredjg wrote:
Wed Jul 10, 2019 2:21 pm
Perhaps you were speaking of just one employer but did not say that specifically. My answer did not assume 1 employer. Also, I too think the 457 is completely separate and I'm not even sure there is a $56k limit on 457 plans.
Limit on 457 is the same as on 403, but they are not included in the 56k overall contribution limit calculation, afaik.

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ruralavalon
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Re: Limit on combined retirement contribution?

Post by ruralavalon » Wed Jul 10, 2019 6:46 pm

sman09 wrote:
Wed Jul 10, 2019 12:33 pm
Dear BH

Reading online i find that per employee(individual), the combined employer+employee contribution towards retirement (401/403/457) should not exceed $56,000 in a year.

Is there a similar limit on how much a couple (filing returns jointly) invest in retirement accounts? If so, does that limit also include employer contribution? We were considering pre-tax allocation in our respective employer provided plans and are in our 30s, in case that matters to help with this information.

Thanks.
IRS, "How Much Salary Can You Defer if You’re Eligible for More than One Retirement Plan?" .

IRS, "Retirement Topics - IRA Contribution Limits".

Traditional contributions are likely better than Roth contributions for most people. I can't tell if that will apply to you, not enough information.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

NewbieBogle007
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Re: Limit on combined retirement contribution?

Post by NewbieBogle007 » Wed Jul 10, 2019 7:14 pm

Regarding contributions to 403b and 457.... Does it matter if one is Roth and one is Trad?

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LadyGeek
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Re: Limit on combined retirement contribution?

Post by LadyGeek » Wed Jul 10, 2019 7:33 pm

This thread is now in the Personal Finance (Not Investing) forum (retirement plan contributions).
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Peter Foley
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Re: Limit on combined retirement contribution?

Post by Peter Foley » Wed Jul 10, 2019 7:54 pm

A good reference for this information is Financial Plan Incorporated's "Numbers Unlimited."

Spirit Rider
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Re: Limit on combined retirement contribution?

Post by Spirit Rider » Wed Jul 10, 2019 9:52 pm

Thesaints wrote:
Wed Jul 10, 2019 3:34 pm
Limit on 457 is the same as on 403, but they are not included in the 56k overall contribution limit calculation, afaik.
The 457b employee elective contribution limit and the employee + employer contribution limit is separate from but equal to the employee elective contribution limit (2019 = $19K). However, it is relatively rare for a 457b plan to have employer contributions.

TropikThunder
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Re: Limit on combined retirement contribution?

Post by TropikThunder » Wed Jul 10, 2019 10:43 pm

sman09 wrote:
Wed Jul 10, 2019 1:19 pm
Good to know! So, it appears i could technically contribute $19,000 each to my 403 and 457 plans and my spouse can still contribute $19,000 to their 401k plan although we will file returns jointly. This is without having to consider how much the employer match was during the year, correct?
Correct. The $19,000 elective deferral limit is per individual, and applies separately for [401k's and 403b's counted together in one bucket] and [457's by themselves in another bucket]. Your can fill both buckets if you have access to both types of plans (and enough money :P ). Employer matching doesn't count against your elective deferral limit since it's not elective: your employer determines whether you get any and how much. All of the elective and non-elective contributions cannot exceed $56,000 (per employer, but that's a tangent for sure).

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