Jump to content
Sign in to follow this  
ft6

Maximum Allowed Contribution

Recommended Posts

I work for a municipality in which I succesfully lobbied for and got Fidelity as our provider for our 457(b) governmental deferred compensation plan.

 

My question is regarding an employee who is 55 years of age and would like to know the maximum they could contribute. I know you are allowed to contribute $15,500 plus an additional $5,000 for the 50 years of age or older catch up provision for a total of $20,500.00.

 

I also read where individuals 50 years of age and older may be able to contribute double that amount but in order to do so they must have made contributions to the plan in the previous years (which he could not have done because this is a new plan and we had no other plans in place.) Is this correct ?

 

He would like to make the maximum annual contribution that he is allowed for 2007 and I would like some clarification on what that amount is.

 

Thanks

Share this post


Link to post
Share on other sites

I personally have not heard of this before. The only instances I've seen of "doubling up" is if you were a W2 employee with a 401(k) AND a 1099 "business owner" who could set up a SEP.... huge opportunities to shelter money there, but again you have to be employed and self employed in the same year.

Share this post


Link to post
Share on other sites

If your employer has a plan document with a listed retirement age, you can double up the $15,500 if you are within 3 years to retirement.

 

Example:

 

Your employer lists 65 as the normal retirement age, you can contribute up to $31,000 when you are age 62, 63, and 64.

 

Keep in mind that this is a catch-up, so it only allows you to catch up missed contributions. So, if you had fully contributed to your 457s in previous years, you would not be able to "catch up" since you've had no deficiency in contributions.

Share this post


Link to post
Share on other sites

Thanks for the input. I read on Fidelity's web site that a 457 b govn't plan will not allow you to take advantage of both. You can either do the catch up or double up, I will call them on Monday for clarification.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

×
×
  • Create New...