DW recently started a new job with an unusual retirement plan situation. Her position is funded from 2 different employers (Employer A and Employer B). Both employers offer separate 403(b)s, which according to a benefit person in her organization have separate contribution limits.
In addition, Employer A has an additional mandatory 403(b) in which 7% of her salary is taken out and the employer matches an additional 7%.
Employer(s) are also a state institution so DW also has access to a governmental 457(b)
All four plans have Boglehead friendly low cost Index funds for domestic, international, bond, and target date funds.
Both of the elective 403(b)s and 457(b) can either be Roth or Traditional.
What I am pretty sure about:
·457(b) contribution and deduction limits are separate from the 403(b) plans
What I think is right from searching similar topics on BH forum (but not 100% sure)
·DWs benefits person is right about separate contribution limits, but all elective 403(b)s share a deduction limit, max 23k in 2024
·The mandatory 403(b) deduction is separate from the other voluntary 403(b)s since it is a required condition for employment
So my questions are, assuming we can afford to max all all available plans:
1)Are the above statements correct?
2)What happens if you exceed the deduction limit, but not the contribution limit when contributing to traditional 403(b) plan(s)?
3)Is the answer different with Roth 403(b)s?
4)Given the above, is there a clear optimal way to utilize these plans? (Amounts, Roth or Traditional)
Financial Snapshot:
Emergency funds: Yes, ~6 months in HYSA
His Income:~120,000/ year
Her Income: ~210,000/ year split roughly 50/50 between 2 employers
Expenses: ~160,000/year
Debt: none, own house
Tax Filing Status: MFJ, (2 school age kids)
Tax Rate: 24% Federal; 0% State. May be subject to NIIT
State of Residence: WA
Ages: 47 and 47
Total Portfolio Size: Low 7-figure
62% Taxable, 33% deferred, 5% Roth
My 401(k): 23k annually + 13k mega-backdoor Roth (the max my plan allows) + employer match
We max backdoor Roths, HSA, I Bonds annually
Thanks for your input
In addition, Employer A has an additional mandatory 403(b) in which 7% of her salary is taken out and the employer matches an additional 7%.
Employer(s) are also a state institution so DW also has access to a governmental 457(b)
All four plans have Boglehead friendly low cost Index funds for domestic, international, bond, and target date funds.
Both of the elective 403(b)s and 457(b) can either be Roth or Traditional.
What I am pretty sure about:
·457(b) contribution and deduction limits are separate from the 403(b) plans
What I think is right from searching similar topics on BH forum (but not 100% sure)
·DWs benefits person is right about separate contribution limits, but all elective 403(b)s share a deduction limit, max 23k in 2024
·The mandatory 403(b) deduction is separate from the other voluntary 403(b)s since it is a required condition for employment
So my questions are, assuming we can afford to max all all available plans:
1)Are the above statements correct?
2)What happens if you exceed the deduction limit, but not the contribution limit when contributing to traditional 403(b) plan(s)?
3)Is the answer different with Roth 403(b)s?
4)Given the above, is there a clear optimal way to utilize these plans? (Amounts, Roth or Traditional)
Financial Snapshot:
Emergency funds: Yes, ~6 months in HYSA
His Income:~120,000/ year
Her Income: ~210,000/ year split roughly 50/50 between 2 employers
Expenses: ~160,000/year
Debt: none, own house
Tax Filing Status: MFJ, (2 school age kids)
Tax Rate: 24% Federal; 0% State. May be subject to NIIT
State of Residence: WA
Ages: 47 and 47
Total Portfolio Size: Low 7-figure
62% Taxable, 33% deferred, 5% Roth
My 401(k): 23k annually + 13k mega-backdoor Roth (the max my plan allows) + employer match
We max backdoor Roths, HSA, I Bonds annually
Thanks for your input
Statistics: Posted by CommonCentsInv — Wed Sep 25, 2024 2:20 pm — Replies 3 — Views 255