I have several jobs. Can I contribute the maximum to multiple employer retirement plans?

By Denise Appleby AAA
A:

It depends. A question such as this requires detailed information in order to provide a helpful response. Here is a general response that may be of help.

Questions: Are any of these companies related or affiliated? For instance, are they owned by the same people? Do you own any of the companies? Are any of the companies part of a parent company? Do any of the companies share resources, staff etc? If the answer is yes to any of these questions, the answer may change from what is provided below. If the answer is no, then the limit is as follows:

Employer Plans
Your aggregate salary deferral contributions cannot exceed $14,000 (plus an additional $4,000 if you reach at least age 50 by December 31, 2005). This means that you can break up the $14,000 among the plans, but your total salary deferrals should not be more than $14,000.

In addition, you may receive employer contributions (contributions from your employer, such as profit sharing and matching contributions) to each plan to the tune of $42,000. However, the $42,000 is reduced by any salary deferral contributions made to the plan. For instance, if you defer $10,000 to one plan, your employer may contribute no more than $32,000 for 2005 (total $42,000). Of course, your contributions are determined by your compensation. For instance, if your employer decides to contribute 25% of your compensation to the plan, and you receive $50,000 in wages, then the employer contribution will be $12,500.

IRAs
Regardless of the number of IRAs you own, whether Roth and Traditional, or either one or the other, your aggregate IRA contribution for 2005 is limited to $4,000, plus an additional $500 if you reach age 50 by December 31, 2005.

As I mentioned earlier, detailed information, including compensation received from each employer and answers to the questions listed earlier would be required in order to provide a definite response.

To learn more, see Making Salary Deferral Contributions - Part 1 and Part 2.

This question was answered by Denise Appleby
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