Sunday, February 25, 2007

Oh you temptress, TIAA-CREF

So I wrote previously about how I am trying to structure my contributions to cram as much money as possible into my retirement accounts this year. Well, TIAA-CREF just sent me a letter about this year's contribution limits for my 403(b).. and my 457(b). What what now?

Apparently I have BOTH a 403(b) and 457(b) set up for me through my work plan. I am not sure what a 457(b) is, but it appears to do the same thing that I am doing with my voluntary contributions to the 403(b). And my maximum limit on it is $14,740. Which means, total between the two, I could put away $30,240.

This has opened up whole new possibilities of cramming money into the account! I am tremendously excited. (Especially since I found out that you can only change your allocations once a quarter, and thus must plan more carefully.) So I think I will wait and see how things shake out in the next couple months as there may be some changes in my life going on, but I might be able to get a whole lot more money in there! (This would also save me a fortune in taxes, given how much self-employment income I have.) Very interesting...

5 comments:

D said...

Wow, sounds great. Your employer seems to set up everything to help you become financially secure. Most likely, because secure employees are happy employees, happy employees move on to new opportunities less.

Is marriage one of those changes this year???? I'm not like a pushy aunt, just curious!

mOOm said...

I just checked it out - state and local governments can have this plan and it is in addition to the 403b. I work for a private university and have a 403b with TIAA-CREF. I think you can change you allocation of new contributions as much as you like - there are some limits on switching money between funds. I am currently maxing out my 403b. My plan is to eventually roll it into a Roth IRA.

I guess if your side business makes enough money then you could in theory stuff most of your aftertax salary into deferred accounts. Otherwise you are going to have to be very frugal to be able to do that on what I think your salary is.

Kira said...

You wouldn't be the first to ask, D =) Actually there is a chance I may be moving in several months, thus leaving the cocoon of my awesome retirement plan and my current (cheap) lifestyle.

Anonymous said...

You might want to check out this site:
http://www.457bwise.com/

It has a sister site for 403(b) plans.

Tired of being broke said...

This is great, I have heard of the 457B I need to look into it.