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New Here - I Overcontributed To My 403(B), What Should I Do?

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Hi all,

 

I am so happy I have found this forum! I graduated relatively recently, and started working at a university. Due to my many years of schooling (and lack of planning while a grad student), I am way behind in my retirement contributions.

I got overly aggressive, and now I have found that I over-contributed to my retirement accounts (401k + 403b combined). For what I have read online, I am still on time to correct the mistake for 2014 (withdraw the excess contribution plus any earnings, pay the taxes).

 

My question is, what should I do for the over-contribution to 2013?

 

I am so worried...all the cost-cutting, and penny pinching may have been for naught.

 

Thanks,

 

Susana

 

 

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Susana

 

Don't beat yourself up too much! It happens.

 

For 2014, it shouldn't be too much of a headache, but for 2013 it's going to take some unravelling. For the process for your 2014 contributions, you can reference this article as it provides detailed steps: http://www.investopedia.com/ask/answers/158.asp.

 

For 2013, you are going to be taxed twice on the overage and withdrawal from the 401(k), which will sting. The excess amount that you put in (you didn't say how much this was) is going to be taxed when you revise your 2013 tax returns, and also in 2014 as you withdrew it from your 401(k).

 

If you're comfortable navigating this yourself - talking to HR at your current company and having them reverse both years and then filing an amended return for 2013, then have at it. However, it may be worthwhile to pay an accountant to re-file 2013 with your amended W-2 that your employer will provide just to be sure you've "dotted every I".

 

Best of luck, and keep being aggressive!

 

Dave

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Guest adirondacks

Are these two separate employers, one for each year? Or is it the same employer for both years? Do both plans refer to the same employer?

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Thanks, Steve. I'll notify my employer on Monday about the overcontribution. I notified TIAA-CREF but they have not replied yet.

For the excess contribution in 2013, i think i'll find an accountant.

 

Adirondack, these two accounts are with the same university. We are not allowed to contribute the annual maximum to our 401k, only an amount that allows us to capture 100% of the match. That's why I decided to open a 403b. When combining my contributions to the two accounts, I am over the limit.

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Guest adirondacks

Some one dropped the ball and it is your employer, the plan sponsor. See what the University says. Put your gorilla face on. THE NEW 403b regulations addressed this very issue yet it is still going on. Did the entire contribution go to T/C or another carrier?

 

Joel

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Guest adirondacks

The Plan Sponsor is responsible for correcting this error...accept nothing else. You may want to check out the 403(b) regulations.

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