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dchinn

403b & 457

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This is going to sound so basic to some of you, but I'm new at this. The question I have is this: I'd like to put aside $13,000 in 2004 -- Can I contribute $5,000 to a 403B and $8,000 to a 457, or do I have to put all $13k into one plan first before I contribute to another? In addition, my employer is going to contribute $5,000 to one of these plans on my behalf. Does it make a difference which plan they contribute to?

 

Thank you.

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Guest Joel

Hi dchinn,

 

You do not have to max out on one plan before contributing to the other. I favor the 457 because there is no premature penalty tax on distributions made prior to age 59.5.

 

Can you direct your employer's match to the plan of your choice? Do the plans have the same or different investment funds? Are the choices no-load funds?

 

Peace and Hope,

Joel L. Frank

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Guest Guest_dchinn

Joel - yes, I can direct my employer to make a contribution to the plan of my choice. Our 403B plan is currently with a load-fund; we will be moving to another (no-load)plan shortly. We have not set up the 457 plan yet, and are in the starting phases of doing so. Would you suggest that I have my employer make the contribution to the 457 plan?

 

Thank you for your helpful advice.

 

dchinn

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Guest Joel

Yes, I would provided it is a no-load offering. It is an outrage for you to pay a load with your contribution...but the felony is compounded when the taxpayers pay a load with the employer match.

 

Peace and Hope,

Joel

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