Employer-sponsored Retirement Plans 2024
Qualified plans: 401k, 401a, 403b, SEP IRA, solo-401k
- Early distribution (before 59.5) may be penalized (10%)
- The rule of 55 may be used (not for SEP)
- RMD applied
- Matching allowed (not for SEP)
- Total annual employee contribution limit: $23,500 into all plans (not applicable to SEP)
- Total employer+employee contribution limit: $69,000
- For 50+ years old, catch-up: +$7,000 (not applicable to SEP)
- In-service distribution may be allowed
- Roth allowed (except for SEP, 401a)
Nonqualified: 457b
- Early distributions are allowed (no penalty)
- RMD applied
- No in-service distributions
- Eligible 457b could be rolled over to IRA, 401k, 403b, or other eligible 457b.
- Total annual (employee+employer) contribution limit: $23,500
- For 50+ years old, catch-up: +$7,000
- Special retirement catch-up: +$23,500 or unused room from the previous year.
- Roth allowed for eligible 457b
Examples
Example 1. Having two qualified plans from two different employers is allowed. Let's assume you work on W-2 at some company and max out the company's 401k ($23,500). You might even be given a match from the company.
You may also open SEP-IRA and contribute as the employer if you have a contractor job.
Example 2. A 401k from a W-2 job and a solo 401k from 1099 contractor work allows maxing out employee contributions up to $23,500 (or $30,500 if 50+).
The employer may add matching or profit-sharing, and your company may add profit-sharing, potentially maxing out the double employer contributions.
Example 3. When you change jobs, you may contribute to 401k plans (if offered), totaling up to $23,500/$30,000 a year.
For example, if you contributed $10,000 to the previous 401k within the same calendar year, you may still be allowed to put an extra $13,500 into the new 401k (+$7,000 if you are 50+).
Example 4. You might be offered nonqualified and qualified plans in a government company, such as 457b and 403b. You are allowed to max out both of them since 457b is a nonqualified plan.