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TIL - Today I Learned...

By AdamCarollaFan follow AdamCarollaFan   2014 May 29, 8:11am 2,271 views   3 comments   watch   nsfw   quote   share    


so, i was having lunch today with some coworkers, and one of them mentioned that he's contributing the maximum amount to BOTH his 403b and his 457 - for a total of $35,000 ($17,500 + $17,500).

BOTH?!?!

so, TIL that you can have BOTH, yes, BOTH a 403b account AND a 457 account (depending on your employer).

wish i would of known this years ago!

http://money.cnn.com/retirement/guide/401k_457plans.moneymag/index2.htm

1   corntrollio   ignore (1)   2014 May 29, 8:38am     ↓ dislike (0)   quote   flag      

You have to be careful there, however, if you are also expecting to get Social Security with payroll taxes at a previous or future job. While a 457 has completely separate limits from a 403(b) and 401(k), 457s may result in reducing your Social Security through the Windfall Elimination Provision if you are not also making Social Security contributions at that job.

There are many state government employer that use 457s as a defined contribution plan in lieu of paying into Social Security. Under the regs, a 457 plan can count as a pension plan that reduces Social Security benefits. If you have 30 years of a Social Security-paying job, you can avoid this, but otherwise you may see a reduction.

Note that you can actually put more money into a 401(k)/403(b) and 457 in some cases, but not all employer plans allow it.

2   AdamCarollaFan   ignore (0)   2017 Jan 13, 1:57pm     ↓ dislike (0)   quote   flag      

corntrollio says

You have to be careful there

that's a good point, corntrolio. thank you. i'm gonna have to look into the WEP!

3   Tenpoundbass   ignore (15)   2017 Jan 13, 2:01pm     ↓ dislike (0)   quote   flag      

corntrollio says

Note that you can actually put more money into a 401(k)/403(b) and 457 in some cases, but not all employer plans allow it.

Why are there Employer based retirement plans that limit what you can invest or how much?

Bring on Savings and Loans, secure those accounts and leave the 401K idiots to the thieves managing their money. They are going to end up getting most of it in fees anyway. Then when you need the money back you will be taxed out the ass for every cent you pull out.
Savings accounts are already taxed, you only need to file taxes on any earned interest. Which would be a hell of a lot cheaper than paying payroll taxes on withdraws from 401K and the other penalties that goes with it.

Investing is great for those that have the wherewithal to know what they are doing. Otherwise most people would be 10 times better off with an interest baring savings account.


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