If you’re age 50 or older, the IRS has a gift for you.
You may already know that the IRS lets you make pretax “catch-up” contributions to your UC 403(b) and 457(b) accounts.
But you might not be aware that UC's 403(b) and 457(b) Plans have “lifetime” and “special” catch-up provisions that may let you contribute even more.
Here’s how they work:
If you’re not age 50 but have at least 15 years of service with UC, you may be able make pretax catch-up contributions under the 403(b) Plan’s “lifetime” catch-up contributions feature. To qualify, your regular 403(b) Plan contributions over time can total no more than $5,000 multiplied by your years of UC service.
If you do qualify, this provision lets you contribute up to $3,000 per year in lifetime catch-up contributions, up to a lifetime maximum of $15,000.
Beginning the year you reach age 50, you can make regular pretax contributions and regular catch-up contributions as well as lifetime catch-up contributions, up to the IRS limits.
For details and assistance, call a representative at 1-866-682-7787.
If you’re nearing retirement, the 457(b) Plan lets you put away additional money during your last three years at UC.
The limit on these “special" pretax catch-up contributions is a multiple of the current regular pretax contribution limit. Two formulas are used to calculate your limit—you will use whichever formula generates the smaller amount:
Since Formula 2 generates a smaller amount than the $36,000 limit from Formula 1, your limit for 2017 will be $24,000.
Note that additional limitations may apply to subsequent years of special catch-up contributions, so call a representative at 1-866-682-7787 for details and assistance.
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