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bjohnson

Can I Contribute Max To Both 403(b) Roth And Roth Ira?

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Can I contribute the maximum allowed $14k into my 403(b) Roth account at work, and still contribute the maximum allowed $5k to an individual Roth IRA account this year?

(for 2009; I'm under 50 years old; also please assume that I'm not exceeding any of the IRS' family income threshold requirements that restrict ROTH IRA contributions)

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bjohnson-

 

Yes.

 

This answer is based on the fact that you suggested that your modified adjusted gross income (MAGI) will quailify for the full Roth IRA contribution in 2009 (up to $105,000 for single filers/up to $166,000 for joint filers).

 

I'm not sure why your 403(b) contribution is limited to $14,000 as the 402(g) limit is $16,500 for 2009. Below is the Q & A from the IRS website that addresses this issue. Please note that the answer is for an individual age 50 or older:

 

"Can an individual make the maximum contributions, including catch-up contributions, to both a designated Roth 401(k) or 403(b) account and a Roth IRA in the same year?

 

Yes. An individual age 50 or older can make a contribution of up to $22,000 in 2009 to the 401(k) or 403(b) plan ($16,500 regular and $5,500 catch-up contributions) and $6,000 to a Roth IRA ($5,000 regular and $1,000 catch-up IRA contributions) for a total of $28,000 for 2009."

 

-Phil

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If I made 200k income (from multiple sources), could I still contribute to a 403B Roth if my regular salary is under 100k? If not, could I convert a traditional IRA to a Roth or is that also subject to income restrictions?

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Talk about bringing an old thread back to life!

I don’t believe income is a factor in eligibility for any employer sponsored plans (401k, 403b, 457b, etc).

Roth Conversions aren’t subject to income restrictions.

Your post was vague and I could probably give you a better response if you were more explicit about your circumstances and what you’re trying to accomplish. For instance if you have ordinary taxable income in the 200k range (one time event?) then you almost certainly don’t want to do a Roth Conversion. 

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I think Ed answered your question. There is an employee contribution limit to employer based retirement 403b plan. For 2019 it's 19k if you are under 50, 25k if you are over 50. The limit applies to any combination of traditional and Roth contributions to your 403b.

There is an income limit to contribute directly to a Roth IRA, based on your modified adjusted gross income (MAGI).

As Ed mentioned there is no IRS limit if you want to convert a Traditional IRA to a Roth IRA. The conversion will add to your taxable income. It might make sense to wait on conversions until your income tax bracket is lower, say in retirement before you start social security? Or during a year between jobs? But the IRS is always willing to have you pay the tax on the conversion now.

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I just occurred to me that you want to do a backdoor Roth IRA (because of your high MAGI) and your tIRA would result in a pro rata tax problem? If that is the reason you want to convert your tIRA to a Roth IRA, have you considered rolling your tIRA into your 403b plan? You would want the 403b plan to be low-cost. (Vanguard does not allow rollovers into their 403b plan.)

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You would want to deplete your tIRA in order to do a back door Roth in order to avoid the pro rata tax situation, like krow36 said, by rolling its contents into either a 457 plan or a 403(b) plan, depending on if the accounts are good plans, and it aligns with your goal.

Once you deplete your tIRA, you can make a contribution to a Roth IRA, taking into account your MAGI, of course, like you said. If it's high or too close to call, you can make a non-deductible IRA contribution and then request a conversion of that into a Roth IRA.

I am in the midst of doing this now with Vanguard and my 457 for 2018. You have an automatic 6 months extension after filing to do this. I will incur a 6% fee on gains made on the contribution but will avoid fees and the ongoing annual 6% fee by doing it now. 

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