A:

Yes. You may participate in both a 403(b) and a 401(k) plan. However, certain restrictions may apply to the amount you can contribute. For instance, you are allowed to make a salary deferral contribution of up to $15,500 for 2007. The combined total salary deferral contribution that you make to both the 401(k) and the 403(b) plans should not exceed $15,500.



Note: 403(b) plans include a special provision that allows you to make salary deferral contributions of additional amounts up to $3,000 if you have at least 15 years of service with certain employers. If you meet the 15-year requirement and would like to contribute the additional amount, you should check with your employer regarding the eligibility requirements and applicable rules.



To learn more, read Increased Savings Opportunities.



This question was answered by Denise Appleby
(
Contact Denise)



RELATED FAQS
  1. I'm a teacher. Which is better for me, a 401(k) or 403(b)? What is the difference? ...

    The first step is to check with your employer regarding any retirement plan(s) it provides for employees, as you can only ... Read Answer >>
  2. What is the difference between a 401(k) plan and a 403(b) plan?

    Administered by for-profit, private companies, 401(k) plans are more common than the nonprofit or government-sponsored 4 ... Read Answer >>
  3. I have several jobs. Can I contribute the maximum to multiple employer retirement ...

    It depends. A question such as this requires detailed information in order to provide a helpful response. Here is a general ... Read Answer >>
  4. I have a 403(b) from a old employer. I would like to convert it to a 401(k). How ...

    The IRS says that you can roll a 403(b) plan into a 401(k) plan if you now work for an employer that offers a 401(k) plan. ... Read Answer >>
  5. Can I contribute to my company-sponsored 401(k) after the company's year-end but ...

    Unlike IRAs, where contributions can be made for the previous year up to April 15 of the current year, salary deferral contributions ... Read Answer >>
  6. What are the 2014 401(k) contribution limits?

    Learn how limitations for 401(k) plans can change; find out what the contribution limits, annual limits and compensation ... Read Answer >>
Related Articles
  1. Retirement

    403(b) Plan: Contributions

    By Denise Appleby A 403(b) account may receive the following types of contributions: Elective-deferral contributions, which are deducted from employee paychecks on a pretax basis Employer contributions, ...
  2. Retirement

    Top 403(b) Questions Answered

    This plan doesn't get as much attention as its more popular cousin - the 401(k) - but it has a lot of benefits for eligible investors.
  3. Retirement

    Top 9 Benefits Of A 403(b) Plan

    A 403(b) plan is a tax-sheltered retirement plan for employees of many non-profit entities, including public safety and educational organizations.
  4. Taxes

    How To Save More For Your Retirement

    The Economic Growth and Tax Relief Reconciliation Act of 2001 made it easier to prepare for the future. Will you be ready?
  5. Retirement

    457 Plans and 403(b) Plans: A Comparison

    There's plenty of advice about 401(k) plans, but what about 457 and 403(b) plans?
  6. Budgeting

    The Complete Guide To Retirement Planning For 40-Somethings: Checking Your Status

    In some cases, individuals add as much as they can to their retirement nest egg and hope that it will be sufficient to meet their retirement needs. However, while such a strategy may work for ...
  7. Retirement

    It’s Never Too Late to Contribute to Your 401(k)

    Find out why it is never the wrong time to start contributing to a 401(k), even in your late 30s, 40s or 50s; discover how to maximize your savings at any age.
  8. Retirement

    Why are 401(k) contributions limited?

    Find out why contributions to 401(k) retirement plans are limited, including what the current contribution limits are and how limits encourage participation.
  9. Taxes

    Common Questions About Retirement Plans

    We offer some solutions for the individual taxpayer as well as the small business owner.
  10. Retirement

    How a 403(b) Works After Retirement

    Everything you need to know (don't be afraid to ask) about handling your 403(b) plan when you retire.
RELATED TERMS
  1. IRS Publication 571: Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of ...

    A document published by the Internal Revenue Service (IRS) that ...
  2. 401(k) Plan

    A qualified plan established by employers to which eligible employees ...
  3. Savings Incentive Match Plan For Employees Of Small Employers - SIMPLE

    A retirement plan that may be established by employers, including ...
  4. Additional Voluntary Contribution – AVC

    An extra allocation of funds to a retirement savings account ...
  5. Unit Benefit Formula

    A method of calculating an employer's contribution to an employee's ...
  6. Tax-Sheltered Annuity

    A type of annuity that allows an employee to make contributions ...
Trading Center