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TP works for a company the offers a 401K and a university that offers a 457 plan. Combined income for 2021 will be around $120K.
What I have been reading appears to indicate that the TP can make the max $19,500 to each plan.
Am I understanding this correctly? Don't want to worry about excess contributions.
Thanks in advance.
Roberta
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The 457(b) is non-qualified, so they can contribute to both.
"the 457(b) elective deferral limit is not offset by 401(k) or 403(b) deferrals. Thus, the maximum deferral limit of $19,500 may be contributed to a 457(b) plan, regardless of whether any deferrals or employer contributions have been made to a 403(b) or 401(k) plan."
From: https://www.captrust.com/navigating-the-number-jumble-403b-401k-457b-comparison/
The limits are different:
https://www.investopedia.com/ask/answers/100314/what-difference-between-401k-plan-and-457-plan.asp
And when learning about them, make sure to pay attention to governmental vs nongovernmental. You didn't describe if that is a private university or state.
The 457(b) is referred to as a Top Hat Plan, and they can be a bit risky:
https://www.investopedia.com/terms/t/top-hat-plan.asp
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Thanks for the reply. I had previously read all of the articles except for the one from captrust.com. I was trying to verify my understanding of those articles. And the 457 is at the University of Minnesota.
Roberta
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"I had previously read all of the articles"
I've really enjoyed investopedia this tax year; they're doing a great job.
Don't yell at us; we're volunteers
