Do you know if any IRS rules prohibit maximum contributions to both a 403b and 457 plan in the same tax year?  If you are over 50 yrs old and envoking the catch-up provision, can you contribute $20,500 to both the 403b and 457? 

 

 

CE- I think so. You can max a 401K and a 457 during the same year. Here's a link to a 2006 article about it, call the IRS and ask for sure.

 

http://taxes.about.com/b/2006/04/12/can-i-contribute-to-both-a-401k-and-a-457-plan.htm#

Yes, you may contribute in 2008 up to the maximum of $15,500 to a the 403(b) plan and up to another $15,500 to a 457(b) plan, as the 457 plan is a deferred comp plan and is considered to be in addition to contributions made to a qualified retirement plan.

Catch-ups are a bit different though.

For a 403(b) plan, if you rare age 50 or older  during the plan year, you may contribute up to an additional $5,000 if the plan allows for it, plus if you have been with the plan at least 15 years (that need not be consecutive), you may be able to make up to an additional $3,000 catch up contribution, although this amount may be reduced using a couple of rather complicated calculations based on past years contributions.

With a 457 plan, you may contribute up to another $15,500 in the final 3 years prior to the plans defined full retirement age, providing you have that much that you UNDERCONTRIBUTED in total for previous years that you were eligible to contribute to the 457(b) plan. Your HR dept should be able to show you how much you undercontributed in your previous working years, if you did undercontribute.

So theoretically with both a 403(b) and 457 plan, if you have been with the employer 15 years and are within 3 years of retirement and undercontributed to the 403(b) and 457 in previous years, you could contribute up to

15,500 + 15,500 + 5,000 + 3,000 +15,000 = 54,500 or 100% of your salary if it is less.

BruceM

At one point in time, I think only educators could max out both (I did).  So it IS doable, I'm simply not sure if it's doable for everyone or if there are limitations.