Contribution Limits for 457(b) Deferred Compensation Program
|Year||Annual 457(b) Contribution Limits|
|Year||Annual 457(b) Contribution Limits||Additional Catch Up Limit||Total 457(b) Contribution Limit|
Cost of living adjustments (COLAs) may allow for additional increases to these limits in increments of $500 per year.
Another catch-up limit allows participants who are within three years of attaining the normal retirement age of 65 to contribute up to twice the "annual contribution limit". For these participants, the maximum amount allowed is actually the lesser of:
- twice the annual limit, or
- the annual limit, plus the total amount of underutilized contributions from prior years.
Participants who use this catch-up limit cannot also use the "age 50" catch-up limit in the same year.
EXAMPLE: Let's assume it is 2013, Jane is 62 years old, and she is within three years of her normal retirement age of 65. Let's also assume that she contributed $6,000 in 2010, $7,000 in 2011 and $8,000 in 2012, for a total of $21,000. However, she could have contributed $50,000 in those three years ($16,500 + $16,500 + $17,000), or an extra $29,000. Because Jane is within three years of her normal retirement age, she can contribute the lesser of:
- $35,000 (twice the annual 2013 limit of $17,500); or
- $46,500 (the 2013 limit of $17,500, plus the $29,000 "left over" amount from the three previous years).
In this example, Jane would be allowed to contribute $35,000 in 2013.