FAQ – Individual Retirement Accounts

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Recently I had an unexpected windfall and put $6,000 in an IRA (I am 65). Can I also contribute to a 403(b) or 457 account?

Yes! Saving money from a windfall for retirement in a tax-advantaged account is a smart move. Any contributions you make to a traditional or Roth IRA do not affect the contribution limits for your 403(b) or 457 plan.

California educators can contribute up to $1​8,​000 per year to their district’s 403(b) or 457 plan – or both, if offered. Those age 50+, as you are, may be able to contribute up to an additional $​6,​000 per year if 50+ catch-up contributions are offered in the plan, for an annual total of $2​4,000.

In addition, if your district has a 403(b) plan, eligible employees with 15 or more years of full-time service may be able to contribute up to $3,000 more for five years, or a maximum of $15,000. If you are eligible for both the 15-year rule increase and the age 50+ catch-up, allocate amounts first under the 15-year rule and next as an age 50+ catch-up.

If your district has a 457 plan, you may be eligible to defer up to two times the contribution limit in effect for the final three years of service. But be aware that employees cannot participate in the three-year catch-up and the 457 plan age 50+ catch-up during the same tax year.

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