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. Who is eligible to obtain a 403(b) plan?

    Learn which employers offer 403(b) plans and see how they are custom-designed for nonprofits but similar to 401(k) plans ... Read Answer >>
  3. 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 >>
  4. 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 >>
  5. I have a small business (LLC), which I operate part-time. I also work full time for ...

    As long as you have no ownership in the company for which you work full-time and the only relationship you have with the ... Read Answer >>
  6. 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 >>
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. Professionals

    403(b) Plans

    403(b) Plans
  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. Retirement

    How Much Can You Contribute to Your 401(k)?

    Given the fairly high compensation limits on these retirement plans, most workers can pitch in more than they currently do.
  5. Retirement

    401(k) Contribution Limits in 2016

    Find out what the contribution limits are for 401(k) retirement savings plans in 2016, including individual, employer and aggregate limits.
  6. Retirement

    403(b) Plan: Introduction

    By Denise Appleby What Is a 403(b) Plan?A 403(b) plan is a retirement plan for certain public school employees, employees of tax-exempt organizations and ministers. Individual 403(b) accounts ...
  7. 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?
  8. 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 ...
  9. Retirement

    Explaining the 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers.
  10. 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.
RELATED TERMS
  1. Designated Roth Account

    An individual retirement plan in which employees can have all ...
  2. IRS Publication 571: Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of ...

    A document published by the Internal Revenue Service (IRS) that ...
  3. 401(k) Plan

    A qualified plan established by employers to which eligible employees ...
  4. Matching Contribution

    A type of contribution an employer chooses to make to his or ...
  5. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt ...
  6. After-Tax Contribution

    A contribution made to any designated retirement or any other ...

You May Also Like

Trading Center