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457 Calendar Year Limit

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How do you calculate the contribution limit for 457 plan?

If let's say I am hired in the month of August, will the limit pro-rated?

i.e.

$15,000 / 12 = $1,250/ month

and therefore I have 5 month = 5 $1,250 = $6,250 is my contribution limit for this year?

 

or it does not matter when I got hire and I still can contribute $15,000 this year assuming I have not contribute anything through my previous job plan this year.

 

Thanks.

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The limit is based on a taxpayer's calendar year. Your date of hire is not relevant. Even if you were hired in December, your elective deferral limit would be the same as if you were hired on January 1.

 

Incidentally, the limit for 2005 is $14,000, not including the additional catch-up for those who are age 50 or higher. It won't increase to $15,000 until 2006.

 

Hope this helps.

 

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