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Russell Bailyn

I Need Some Clarity On 457 Plans

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I heard from a friend that some teachers utilize 457 plans to make excess contributions upon maxing out their 403bs... I'm having trouble discerning what this means. My impression is that the limits are 15k, or 20k with the catch-up regardless of whether it's into just a 403b, split between a 403b and 457 etc. Is there a rule which allows additional contributions into a 457? Also, who exactly contributes to 457's? I didn't think teachers were eligible for them? Thank you!

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I heard from a friend that some teachers utilize 457 plans to make e######cess contributions upon ma######ing out their 403bs... I'm having trouble discerning what this means. My impression is that the limits are 15k, or 20k with the catch-up regardless of whether it's into just a 403b, split between a 403b and 457 etc. Is there a rule which allows additional contributions into a 457? Also, who e######actly contributes to 457's? I didn't think teachers were eligible for them? Thank you!

 

 

Hey Russell---long time no see; in any event I would like to remind you that you said the following on June 26, 2006: " I consider myself e######tremely knowledgeable about 403(b) and other retirement plans."

 

May I suggest to you that you start to practice some humility. You, as a COMPENSATED "pro" SHOULD know like you know the nose on your face that ALL state and local governmental employees are eligible for 457(b). So the K-12 crowd being local governmental employees are and have been for the past 25 years eligible for a 457(b) plan. Being employees of a public school also entitles the k-12 crowd to a 403(b). Prior to 2002 the Ma###### for 403(b) was greater than the ma###### for 457(b). Additionally, the two amount were aggregated at the 403(b) ma######. So there was no compulsion for a public school district to offer both types of arrangements. 2001 changed all of that. Now the ma######imum amounts are the same and the aggregation rule has been eliminated. Today the term "e######cess contributions" probably means that if your teacher/client Sam under age 50 can afford to defer $20,000 and has both plans at his disposal and he ma######es out the 403b at 15,000 he contributes the "e######cess" of 5000 to the 457b.

 

I could probably get a good fee for the above "knowledge" ---what say you?

 

Peace and Hope,

Joel L. Frank

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I heard from a friend that some teachers utilize 457 plans to make excess contributions upon maxing out their 403bs... I'm having trouble discerning what this means. My impression is that the limits are 15k, or 20k with the catch-up regardless of whether it's into just a 403b, split between a 403b and 457 etc. Is there a rule which allows additional contributions into a 457? Also, who exactly contributes to 457's? I didn't think teachers were eligible for them? Thank you!

 

 

Hey Russell---long time no see; in any event I would like to remind you that you said the following on June 26, 2006: " I consider myself extremely knowledgeable about 403(b) and other retirement plans."

 

May I suggest to you that you start to practice some humility. You, as a COMPENSATED "pro" SHOULD know like you know the nose on your face that ALL state and local governmental employees are eligible for 457(b). So the K-12 crowd being local governmental employees are and have been for the past 25 years eligible for a 457(b) plan. Being employees of a public school also entitles the k-12 crowd to a 403(b). Prior to 2001 the Max for 403(b) was greater than the max for 457(b). Additionally, the two amount were aggregated at the 403(b) max. So there was no compulsion for a public school district to offer both types of arrangements. 2001 changed all of that. Now the maximum amounts are the same and the aggregation rule has been eliminated. Today the term "excess contributions" probably means that if your teacher/client Sam under age 50 can afford to defer $20,000 and has both plans at his disposal and he maxes out the 403b at 15,000 he contributes the "excess" of 5000 to the 457b.

 

I could probably get a good fee for the above "knowledge" ---what say you?

 

Peace and Hope,

Joel L. Frank

 

 

 

I'm sure you could Joel... I'm sure you could. Thank you for your warm welcome.

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Guest Joel F

 

 

I heard from a friend that some teachers utilize 457 plans to make excess contributions upon maxing out their 403bs... I'm having trouble discerning what this means. My impression is that the limits are 15k, or 20k with the catch-up regardless of whether it's into just a 403b, split between a 403b and 457 etc. Is there a rule which allows additional contributions into a 457? Also, who exactly contributes to 457's? I didn't think teachers were eligible for them? Thank you!

 

 

Hey Russell---long time no see; in any event I would like to remind you that you said the following on June 26, 2006: " I consider myself extremely knowledgeable about 403(b) and other retirement plans."

 

May I suggest to you that you start to practice some humility. You, as a COMPENSATED "pro" SHOULD know like you know the nose on your face that ALL state and local governmental employees are eligible for 457(b). So the K-12 crowd being local governmental employees are and have been for the past 25 years eligible for a 457(b) plan. Being employees of a public school also entitles the k-12 crowd to a 403(b). Prior to 2001 the Max for 403(b) was greater than the max for 457(b). Additionally, the two amount were aggregated at the 403(b) max. So there was no compulsion for a public school district to offer both types of arrangements. 2001 changed all of that. Now the maximum amounts are the same and the aggregation rule has been eliminated. Today the term "excess contributions" probably means that if your teacher/client Sam under age 50 can afford to defer $20,000 and has both plans at his disposal and he maxes out the 403b at 15,000 he contributes the "excess" of 5000 to the 457b.

 

I could probably get a good fee for the above "knowledge" ---what say you?

 

Peace and Hope,

Joel L. Frank

 

 

 

I'm sure you could Joel... I'm sure you could. Thank you for your warm welcome.

 

 

Why the sarcasm? You need to grow up. Isn't a "thank you" in order? Do you feel that one who brags abount his knowledge exhibits humility?

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I heard from a friend that some teachers utilize 457 plans to make e######cess contributions upon ma######ing out their 403bs... I'm having trouble discerning what this means. My impression is that the limits are 15k, or 20k with the catch-up regardless of whether it's into just a 403b, split between a 403b and 457 etc. Is there a rule which allows additional contributions into a 457? Also, who e######actly contributes to 457's? I didn't think teachers were eligible for them? Thank you!

 

 

Hey Russell---long time no see; in any event I would like to remind you that you said the following on June 26, 2006: " I consider myself e######tremely knowledgeable about 403(b) and other retirement plans."

 

May I suggest to you that you start to practice some humility. You, as a COMPENSATED "pro" SHOULD know like you know the nose on your face that ALL state and local governmental employees are eligible for 457(b). So the K-12 crowd being local governmental employees are and have been for the past 25 years eligible for a 457(b) plan. Being employees of a public school also entitles the k-12 crowd to a 403(b). Prior to 2001 the Ma###### for 403(b) was greater than the ma###### for 457(b). Additionally, the two amount were aggregated at the 403(b) ma######. So there was no compulsion for a public school district to offer both types of arrangements. 2001 changed all of that. Now the ma######imum amounts are the same and the aggregation rule has been eliminated. Today the term "e######cess contributions" probably means that if your teacher/client Sam under age 50 can afford to defer $20,000 and has both plans at his disposal and he ma######es out the 403b at 15,000 he contributes the "e######cess" of 5000 to the 457b.

 

I could probably get a good fee for the above "knowledge" ---what say you?

 

Peace and Hope,

Joel L. Frank

 

 

 

I'm sure you could Joel... I'm sure you could. Thank you for your warm welcome.

 

 

Why the sarcasm? You need to grow up. Isn't a "thank you" in order? Do you feel that one who brags abount his knowledge e######hibits humility?

 

 

To be perfectly honest, I had forgotten about the banter back in June. Unlike you, I don't hang out in chat rooms all day seeking self-validation. I have a business to run. I was shocked when Dan told me you don't get paid to do this. I understand you sit around polluting the benefitslink forums as well. I certainly hope you made some money in your lifetime to justify your incessant whining... "peace and hope" to you.

 

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Russell, the Economic Growth and Ta###### Relief Reconciliation Act of 2001 contained a provision that "uncoupled" 403(b) and 457 contribution limits. Effective for ta###### years beginning after 12/31/2001, a participant in both types of plans can contribute the ma######imum elective deferral limit to each plan. Thus, during 2006 $15,000 can be contributed to a 403(b) and an additional $15,000 can be contributed to a 457 plan.

 

In addition, each plan would be eligible for an additional $5,000 catch-up if the participant is over age 50. Just keep in mind that the catch-up provisions for 457 plans contain some special provisions if in the last three years of employment and that there is a coordination of the "age 50" and "15 years of service" catch-ups on 403(b) plans.

 

I hope this is of some benefit to you.

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