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Can You Have Multiple 403 (b)s?

By Dr. Jim Dahle, WCI Founder

One of the greatest challenges of WCI is answering Speak Pipe (pre-recorded) questions on the podcast. While Megan Scott (podcast producer) and Wendel Topper (AV guru) spend many hours on a podcast episode, the only time I spend on it—at least for the Q&A-type episodes—is literally the time you hear me talking on the episode. Sometimes the questions left on the Speak Pipe are actually pretty challenging, especially when you don’t know they’re coming. That means I sometimes get them wrong, especially when they get way out into the weeds.

The 90-second Speak Pipe time limit sometimes also means that I don’t have the complete information. I got one of these questions wrong recently (and was rapidly corrected as usual). I subsequently got the rest of the story from the person leaving the Speak Pipe question and thought it would make for an interesting blog post. You see, this doc has access to not one, not two, not three, but four separate 403(b)s, all of which offer a match. In addition, the doc has 1099 income for which he has started a solo 401(k).

I’d never met someone with three 403(b)s, much less four, especially when every one of them offers a match. But after diving into all the plan documents, this is what the doc has available to him.

403(b) #1 (Physician Group)

  • Salary $200,000.
  • Match 5% per 6% contributed for a maximum $10,000 employer match for a $12,500 employee contribution

403(b) #2 (State Medical School)

  • Salary $125,000
  • Match 10% per 5% contributed for a maximum of $12,500 employer match for a $6,250 employee contribution

multiple 403(b)s

403(b) #3 (VA)

  • Salary $100,000
  • Match 7% per 7%  contributed for a maximum of $7,000 employer match for a $7,000 employee contribution

403(b) #4 (Hospital Call Pay)

  • Salary $25,000
  • Match 3% per 3% contributed for a maximum of $750 for an employee contribution of $750

When you add all of this up, you see a total available employer match of $32,250. To get that entire match, one must contribute $26,000, which is $3,500 MORE than somebody could put into 403(b)s in 2023 as an employee contribution (in 2024, the limit has been raised to $23,000). Or so I thought.

It turns out that, unlike an IRA, there is no contribution limit. There is a deduction limit. So, the doc can contribute $26,000 to 403(b)s to get his entire match; he just can only deduct $22,500. Frankly, I’m not even sure the IRS is going to catch that given how 403(b) contributions result in lower income reported on the W-2. Thank you to tax guru spiritrider on the WCI Forum for pointing that out. Technically, that last $3,500 is going to be taxed twice. Once when you make it—and then again when it is withdrawn from the account. Maybe that’s a $1,500 tax bill. But this doc got an extra $3,500 for that contribution. It’d be well worth overcontributing.

Interestingly enough, spiritrider also pointed out that excess Roth 403(b) contributions are also supposed to be taxed again when withdrawn, but the IRS doesn’t actually have a mechanism to track or report those. Wink, wink. If one or more of those 403(b)s offers a Roth 403(b) option, I’d certainly use it—at least for that last $3,500.

In addition to all this W-2 income and 403(b)s, this doc also earns $50,000-$100,000 a year of 1099 income from expert witness and consulting work, and he is wondering about the merits of an individual (solo) 401(k). However, there is a quirky rule that applies only to 403(b)s and not 401(k)s. In 2024, you can max out two 401(k)s at $69,000 a piece so long as the employers are unrelated [the limit was $66,000 for those under 50 in 2023]. Many WCIers are in this situation with some W-2 income and some 1099 income. Two 401(k)s; two 415(c) limits.

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However, if your employer offers you a 403(b) instead of a 401(k), your 403(b) and your solo 401(k) actually share the same 415(c) limit ($66,000 in 2023 and $69,000 in 2024). In this particular doctor’s case, all four of his 403(b)s AND his solo 401(k) share one limit. That means if he contributes $26,000 into his 403(b)s and his employers match $32,250 into the 403(b)s, that’s a total of $58,250, leaving only $7,750 ($66,000 – $58,250 for 2023) he can contribute to the solo 401(k) as an employer contribution (or an after-tax/Mega Backdoor Roth IRA contribution).

This physician’s family situation becomes even more fun because his wife works and she has a 403(b) as well, And that state medical school job? That offers a 457(b). And they both have Backdoor Roth IRAs. That’s nine active retirement accounts to which they contribute each year. And I thought we had a lot with six.

What do you think? Do you have multiple 403(b)s? What’s the most you’ve ever heard of someone having? How many retirement accounts are you actively contributing to each year? Comment below!


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