403b at one job, 457 at another?

[MochaDoc]

Potentially super easy question.

My professional life is a bit in flux but will solidify within the next three months.

I will max out my 403b in February and have plans to max out a 457 this year as well. However, if things work out I will be at a new job by the end of the year. The new job offers a 457 and seems more stable than my current job which is why I'm disinclined to max out the 457 at this job.

Are there any tax rules that I must do both my 403b and 457 with the same employer?

 

[cgossage]

Hi,

The situation you described makes sense.  You could always roll-over the 457(b) in your existing employer to your new employer when the time to change jobs actually occurs, but if you are concerned about the money being stuck in a 457(b) that you don't feel is stable, there is no issue in waiting to max out until later in the year.

Thanks,

[Bmac]

1. No problem maxing our 403b and 457 in same year.
2. Be careful to check 457 rules specific to your current job. I believe Nongovernmental 457s can be very restrictive regarding rollovers. It might be better to wait for new job a and just max that 457.

[The Physician Philosopher]

Agreed. Ask your employer for the plan documents.  My employer does not allow for rollovers from their 457.

I couldn't tell if you were asking another question (can I max out two different 457s?)... if that is a question of yours the answer is no.  You have one annual limit (18500 in 2018).

[Bmac]

Nongovernmental 457s may not have a catch up option, afaik

[spiritrider]

To add another data point with 403b plans. In addition to the one employee deferral limit for all qualified plans. Since a 403b is considered controlled by the participant. All 403b plans are considered affiliated employers and have only one annual addition limit.

[cgossage]

Bmac wrote:

Nongovernmental 457s may not have a catch up option, afaik

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Most I've seen do, but it doesn't hurt to check the plan document.

[jfoxcpacfp]

Careful. There are 2 different kinds of employers for 457b plans. Governmental employer plans are treated more like "normal" qualified plans, allowing 457b's to be rolled out into IRAs, into another employer's 401k (if allowed) and so forth. You have the ability to do catch-up contributions, take plan loans, etc.

NON-governmental employer 457b's (i.e. non-profit organizations) are far more restrictive. You can only roll over to another NPO 457b plan (if allowed) and any activities in regard to these accounts are dictated by the plan documents, which can vary widely.

Comparison charts here.

[MochaDoc]

Thanks for all the information.

Just to clarify, I am inquiring about one 403b and one 457(b) for 2018.

To my knowledge, haven't asked the appropriate individuals yet, at my current job you are not allowed to invest in the 457 until after you've maxed out your 403b. I did not know if this was a general rule or one specific to my current job. I have some free time today so I'll get more details from my current job about the 457b by the end of the day.

[cgossage]

MochaDoc wrote:

Thanks for all the information.

Just to clarify, I am inquiring about one 403b and one 457(b) for 2018.

To my knowledge, haven’t asked the appropriate individuals yet, at my current job you are not allowed to invest in the 457 until after you’ve maxed out your 403b. I did not know if this was a general rule or one specific to my current job. I have some free time today so I’ll get more details from my current job about the 457b by the end of the day.

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That seems strange.  Typically you can contribute to both concurrently.

[jhwkr542]

That seems specific to just your current job.  My wife contributes to her 403b and 457b concurrently.

[MochaDoc]

cgossage wrote:

MochaDoc wrote:

Thanks for all the information.

Just to clarify, I am inquiring about one 403b and one 457(b) for 2018.

To my knowledge, haven’t asked the appropriate individuals yet, at my current job you are not allowed to invest in the 457 until after you’ve maxed out your 403b. I did not know if this was a general rule or one specific to my current job. I have some free time today so I’ll get more details from my current job about the 457b by the end of the day.

Click to expand…

That seems strange.  Typically you can contribute to both concurrently.

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Interesting that you mention that.

I spoke to the representative at Fidelity who is somewhat familiar with my eligible plan(s). Apparently, I do not even have a 457 currently set up so I'll need to look into the what and why behind all this.

On another note, I initially signed up for a 401k but was switched into the 403b but all the nurses I've spoken to are in 401ks. I'm looking forward to getting all my questions answered once I speak to the appropriate person in HR because this all seems unnecessarily opaque and convoluted.

[MochaDoc]

jhwkr542 wrote:

That seems specific to just your current job.  My wife contributes to her 403b and 457b concurrently.

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That's basically what the Fidelity rep told me but he didn't know why my job had it set up as such. I look forward to unraveling this mystery.