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Click here to go backSaving for retirement when you belong to multiple retirement plans
The most you can contribute from your wages to retirement plans each calendar year is your individual contribution limit. Although your limit is affected by the plan terms, it generally doesn’t depend on how many plans you participate in or on the type of employer who is sponsoring those plans. If you exceed your individual contribution limit and the excess isn’t returned by April 15 (sooner for a 457(b) plan) of the next year, you could be subject to double taxation:
• once in the year you deferred your salary, and
• again when you receive a distribution. Limits
• General limit for 2016 — You may contribute a total of $18,000 in pre-tax or designated Roth contributions to all your plans (not counting 457(b) plans).
• Age-50 catch-up contributions — If you are age 50 or older by the end of 2016, you may be able contribute an additional $6,000 in total to your 401(k), 403(b) or governmental 457(b) plan.
• 403(b) plans’ 15-year catch-up contribution — If you have at least 15 years of service with your employer, you may be able to contribute up to an additional $3,000 to your 403(b) plan.
• 457(b) plans’ separate contribution limit — A separate individual contribution level for 457(b) plans and additional catch-up amounts depend on whether the plan sponsor is a state or local government, or some other tax-exempt organization. Check your plan documents for the amount you can contribute to the plan, and make sure you don’t exceed your limit.
If you have any questions regarding accounting, domestic taxation, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.
Source: IRS