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Public Employees can Double-dip on Retirement

I’ve been finalizing our budget for the upcoming year. Included is determining how much to contribute to our various retirement accounts [1]. My husband works for a university, so he has two plans available to him: the 457 [2] and the 403b [3].

Double Contribution

Did you know that the elective deferral limits [4] are for each plan? You can contribute the maximum to both plans, effectively deferring double the amount that is usually allowed for private sector employees through a 401k.

457 Advantage

When you can’t fully fund both plans, there’s a great benefit to a government 457 plan. There is no early withdrawal penalty! The standard 10% withdrawal penalty [5] for using funds before age 59 1/2 doesn’t exist. It’s also important not to roll 457 money into another plan to preserve this benefit.