Multiple IRA Contributions

If you have multiple IRA acccounts, you can make multiple IRA contributions. For example if you are a SEP IRA, a SIMPLE IRA, a Keogh plan, and a 401k, how can you make multiple IRA contributions? The examples below illustrate how you can make multiple IRA contributions.

What is the contribution limit to Salary Deferral (Employee Funded) Retirement Plans?

For 2006 an individual under 50 years old may defer a maximum of $15,000 in total to all salary deferral plans (such as 401k retirement plan, 403b retirement plan, Section 457, and SARSEP IRA plans) offered by the individual's employers.

The limit for all SIMPLE IRA plans for 2006 is $10,000. So, if you are deferring $10,000 into a SIMPLE IRA at job 1 during 2005, you can defer only $4,000 into a 401k at job 2. But if the retirement plan at job 2 is also a SIMPLE IRA plan, then you cannot defer anything into that second retirement plan, because you have reached the $10,000 limit for all of his/her SIMPLE IRA plans.

It is your responsibility to ensure that you do not defer more than the IRA contribution limits whether it be a SIMPLE IRA contribution limit, a SEP IRA contribution limit, a Keogh plan contribution limit or other retirement plan contribution limits. For SIMPLE IRA, it is $10,000 in 2006. For 401k it is $15,000 in 2006.

Salary deferrals are generally made from compensation paid during a calendar year.

Catch-up Contributions: There is a catch-up provision for participants age 50 or older at any time during the tax year that allows them to contribute

Multiple Contribution Limits

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