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.
- Malden Public Schools
- Manchester Essex Regional School District
- Mansfield Public Schools
- Martha’s Vineyard Regional High School
- Marshfield Public Schools
- Masconomet Regional School District
- Maynard Public Schools
- Melrose Public Schools
- Methuen Public Schools
- Middleborough Public Schools
- Milton Public Schools
- Minutemen Regional
- Wakefield Public Schools
- Waltham Public Schools
- Watertown Public Schools
- Wayland Public Schools
- Wellesley Public Schools
- Westford Public Schools
- Weston Public Schools
- Westport Public Schools
- Westwood Public Schools
- Weymouth Public Schools
- Whitman-Hanson Regional School District
- Wilmington Public Schools
- Winchester Public Schools
- Woburn Public Schools
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