How does one go about opening a Roth 457 or Roth 403(b)? Can you contribute $16,500 into a Roth 403(b)/457 and $5,500 into a traditional Roth IRA?
You may open a Roth 403(b) or Roth 457 only if your district offers those options. 2011 is the first year that districts have been able to offer Roth 457 plans; Roth 403(b) plans have been available a little longer. Your district can supply the paperwork necessary to open those accounts. Read more about Roth accounts and compare features of a traditional 403(b) and a Roth 403(b) at What Is a Roth 403(b) Plan? at CTAinvest.org.
The maximum annual contribution to a Roth 403(b) or Roth 457 plan in 2011 is $16,500; $22,000 if you are 50 or older. If both plans are offered by your district, you may contribute the maximum to both. The maximum annual contribution to a traditional or Roth IRA in 2011 is $5,000; $6,000 if you are age 50 or older. You may contribute to an IRA regardless of what other retirement plans you contribute to. And you may contribute to both a traditional and a Roth IRA; however, the maximum of $5,000 (or $6,000) applies to whatever combination of IRAs you have.
Important Note: CTA does not give tax, legal or investment advice. You should meet with your tax, legal, and/or investment advisor to determine the best fit for your situation.