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  • Avatar Larry Ragman 
    Participant
    Status: Other Professional
    Posts: 617
    Joined: 08/30/2018

    If the 401a and the 403b were at the same employer, there would only be one combined annual addition limit.

    Click to expand…

    This appears to contradict my plan set up, so perhaps I understand it incorrectly. I’ll have to dig out the plan details, but objectively I get a separate $56k total for both my employee contributions (403b) and employer contributions (401a). I’m certain about two separate limits, because I max both with employee after tax contributions. Less clear about what IRS paragraphs are operative.

    Regarding the OP’s original question, my employer contributes 2.5% and matches an additional 8%. Match starts after first year but vests immediately when it starts.

    Only recently, we added an executive plan, by which the employer contributes an amount equal to 25% of salary to a 457f. Vests over four years. We also have a separate 457b, but no match.

    #213900 Reply
    Liked by SLC OB
    Avatar spiritrider 
    Participant
    Status: Small Business Owner
    Posts: 1910
    Joined: 02/01/2016
    spiritrider wrote:If the 401a and the 403b were at the same employer, there would only be one combined annual addition limit.
    Click to expand…

    This appears to contradict my plan set up, so perhaps I understand it incorrectly. I’ll have to dig out the plan details, but objectively I get a separate $56k total for both my employee contributions (403b) and employer contributions (401a). I’m certain about two separate limits, because I max both with employee after tax contributions. Less clear about what IRS paragraphs are operative.

     

    I stand corrected and in fact I’m usually the one who points out the exception that 403b plans are considered controlled by the participant. I am usually, raising the issue when contributions must be aggregated with any retirement plan contributions of a business owned > 50% by the 403b participant. What has the potential to limit you when you have a one-participant 401k, helps you when you have a 401a, 403b and/or 401k.

    This is because of 26 CFR § 1.415(f)-1 – Aggregating plans, (f) Section 403(b) annuity contracts, (1) In general.

    In the case of a section 403(b) annuity contract, except as provided in paragraph (f)(2) of this section, the participant on whose behalf the annuity contract is purchased is considered for purposes of section 415 to have exclusive control of the annuity contract. Accordingly, except as provided in paragraph (f)(2) of this section, the participant, and not the participant’s employer who purchased the section 403(b) annuity contract, is deemed to maintain the annuity contract, and such a section 403(b) annuity contract is not aggregated with a qualified plan that is maintained by the participant’s employer.

    #213911 Reply
    Avatar spiritrider 
    Participant
    Status: Small Business Owner
    Posts: 1910
    Joined: 02/01/2016

    You never cease to amaze me. Do you plug your brain into some kind of device that syncs with the tax code?

    Click to expand…

    Maybe, but sometimes as in this case the link is a little fuzzy and I remember it wrong.

    #213916 Reply
    Liked by SLC OB
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3095
    Joined: 09/18/2018

    @spiritrider,
    • Types of ORP Accounts:
     403(b)(1) fixed or variable (mutual fund) annuity account
     403(b)(7) custodial account (mutual fund investments with no annuity shell)
    Two options in ORP. Contributions are mandatory. The teachers pension fund the other option,
    • 6.65% employee 8.5% employer (statute) $280k Max
    $18,620 , $23,800
    • Optional 403b Traditional (pretax) and/Roth
    19k no match.
    • Optional DCP 457b Deferred Comp
    19k no match

    The two optional and employer total $61,800.
    With the $56k total, then DCP would be reduced $5.8k?
    Thank you in advance.

    #213918 Reply
    Liked by SLC OB
    Avatar spiritrider 
    Participant
    Status: Small Business Owner
    Posts: 1910
    Joined: 02/01/2016

    As I corrected, you would not be limited to $56,000. You have a separate $56,000 annual addition limit for the 401a and the 403b. They 457b has a separate $19,000 limit. So your allowed contributions are:

    • 401a: $18,620 EE + $23,800 ER = $42,420.
    • 403b: $19,000 EE
    • 457b: $19,000

    Note: If either the 401a or the 403b support employee after-tax contributions and in-plan Roth rollovers and/or in-service rollovers of the after-tax account. You could also do Mega Backdoor Roth rollovers: $56,000 – $42,420 = $13,580 to the 401a and/or $56,000 – $19,000 = $37,000 to the 403b.

    #213938 Reply
    Lordosis Lordosis 
    Participant
    Status: Physician
    Posts: 1867
    Joined: 02/11/2019

    My employer gives it based on a formula of you age plus years seniority. Under 50 you get 2% between 50-70 you get 4%. Above 70 you get 6%. Everyone also gets 1% on top. Being new I get 3%. Vested immediately.

    “Never let your sense of morals prevent you from doing what is right.”

    #213965 Reply
    Liked by SLC OB
    Avatar wideopenspaces 
    Participant
    Status: Physician
    Posts: 1141
    Joined: 01/12/2016

    Currently get 14 percent of salary into a 401a. I’m moving to the VA in a few months and we get a match that comes out to about 13k/ year. Not sure what the percentage is- it’s the VA so some complicated percent of base salary plus cost of living stipend. Or something like that.

    My husband is in tech and gets a crappy 2 percent match. But then gets company stock in very generous amounts that vests over 4 years.

    Click to expand…

    Just FYI wideopenspaces the VA match is pretty simple–5% of adjusted basic pay (which is comprised of basic pay + locality adjustment).  The first 1% is automatic, then dollar for dollar for first 3% contributed, then 50 cents on the dollar for next 2% contributed, for a total of 5%.  It’s per paycheck, so you can’t front load your TSP (or if you do you’ll lose out on a lot of the match)

    Click to expand…

    Thanks! My salary will be so much higher at the VA I didn’t even ask about retirement 🙂 But I will miss having so much tax protected retirement space . . .

    #213981 Reply
    Liked by Zaphod, Anne, SLC OB
    Avatar TheDangerZone 
    Participant
    Status: Physician
    Posts: 30
    Joined: 12/23/2018

    The variability is really interesting.

    I consider myself fortunate. We have a 3:1 match up to 5% of employee contribution into a 403b. So each paycheck I put in 5% and they put in 15%. Immediate vesting. Eligible after one year of employment. 280k seems like a common number here, and for me that’s the magic salary number to max out the annual account total contribution of 56k without needing to contribute more than 5%.

    #214014 Reply
    Liked by Craigy, SLC OB
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 8147
    Joined: 01/09/2016

    Eligible after one year of employment. 280k seems like a common number here, and for me that’s the magic salary number to max out the annual account total contribution of 56k without needing to contribute more than 5%.

    Click to expand…

    $280k is the current IRS limit

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #214027 Reply
    Liked by SLC OB, Lordosis
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3095
    Joined: 09/18/2018

    @spiritrider,
    1) Where your response used 401a, it is a 403(b)(7) .

    2) Regarding Roth’s,
    403b has a Roth option. 19k was the plan. I don’t believe after tax contributions are allowed for Mega Backdoor Roth. Was planning on a personal Backdoor Roth.

    3) The accounts needed are individually set up :
    403(b)(7) ORP mandatory
    403b savings optional taxable
    403b savings optional Roth
    457b DCP
    Restricted vendors (Fidelity is approved)
    Personal:
    IRA (for Backdoor)
    Roth (for Backdoor)
    Taxable ( personal use)
    i401k (if 1099 so it’s available future).
    Considered Vanguard and Fidelity. Fidelity has more future flexibility is my understanding. That’s eight accounts for one paycheck, seems to make sense to use one vendor. Any problems with Fidelity?

    I am sure many have benefited from your advice. Thank you.

    #214037 Reply
    Avatar SLC OB 
    Participant
    Status: Physician
    Posts: 572
    Joined: 06/23/2018
    Any problems with Fidelity?

    Click to expand…

    I use them, been super happy.

    #214039 Reply
    Rogue Dad, M.D. Rogue Dad, M.D. 
    Participant
    Status: Physician
    Posts: 975
    Joined: 03/07/2016

    Private university in midwest

    0% years 0-2
    7% years 2-10
    10% years 10+
    Vested immediately

    They used to adjust based on age (*edited*) but changed it before I joined.

    http://www.RogueDadMD.com

    An alt-brown look at medicine, money, faith, and family

    #214045 Reply
    Liked by SLC OB, Tim
    Avatar BE87 
    Participant
    Status: Physician
    Posts: 22
    Joined: 04/28/2018

    Employer 401k, they match 200% of employees contribution up to 4% of salary. Immediately vested. In 2018 I contributed 9k and they put in 18k.

    #214088 Reply
    Liked by SLC OB, Zaphod
    Avatar FatherPsychiatry 
    Participant
    Status: Resident
    Posts: 18
    Joined: 01/16/2018

    Wow some of the matches here are amazing

    #214095 Reply
    Avatar LizOB 
    Participant
    Status: Physician
    Posts: 321
    Joined: 06/05/2017

    6% match, vested after 3 years. They only match on base salary rather than “bonuses”- which I use in quotes because it’s really the end-of-quarter reimbursement for my productivity (I’m RVU based). This upset me because my base salary was on the lower end and over 1/3 of my compensation was “bonus” last year, but that was updated this year so my base pay is now $275k which is super close to the IRS limit for matching.

    #214218 Reply
    Liked by SLC OB

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