By: Tim Hayes Financial Advisor - posted in: Public School Employees - Last updated Jul 18, 2019

403b and 457 Plans and Catch-Ups

Your school system provides you with a list of 403(b) companies. The 457 is different. The city/town usually provides one company.

Both provide you with a broad range of investment options.

You decide what plan to use and the amount that you want to save before taxes from your paycheck.

In 2019, the basic limit is $19,000, and an educator age fifty or over can save an additional $6,000.

The IRS, however, allows educators to contribute $19,000 to a 403(b) and a 457.*

Also, both plans have unique additional catch-up options.

The 403(b) catch-up allows some public school employees with 15 years of service with the same employer to contribute an additional $3,000 a year for five years.

One problem with this catch-up is any amounts contributed over $18,000 are credited first against the 15-year rule. So, a teacher who is age fifty or above could use up the fifteen-year catch-up without knowing it.*

The 457 plan has a much larger catch-up. It allows eligible employees to contribute $36,000 a year for three years before they reach their “normal retirement date.” *

Both provide a tax-friendly opportunity to build wealth and supplement your state pension.

“PLEASE NOTE: The information being provided is strictly as a courtesy. When you access this link you are leaving our website and assume total responsibility for your use of the website you are linking to. We make no representation as to the completeness or accuracy of information provided at this website. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, websites, information and programs made available through this website.”

Book an Appointment Phone or In-Person

July 2019
MonTueWedThuFri
12345
89101112
1516171819
2223242526
29303112

About Financial Advisor Tim Hayes

Independent Financial Advisor

I am registered with Cambridge Investment Research, Inc., a broker-dealer with over 3,000 Registered Representatives nationwide. Investment Adviser Representative at Cambridge Investment Research Advisors, Inc., a $94B RIA based in Fairfield, IA. I've held an industry securities registration for 26 years and am subject to SEC and FINRA oversight.

Click to Call

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Pin It on Pinterest

Share This
%d bloggers like this: