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I'll only work 6 months this year and then retire in August but I want to squeeze in the full 18K plus 6K catch-up to my 403(b) in that time by doubling up on my monthly contribution. Will the IRS allow it?
Last edited by thrillobyte; 01-18-2017 at 07:11 PM..
Yes, you just up your contribution rate. My husband only worked Jan of 2016 and he was able to contribute maybe $9k out of $24k. So I think you should be able to do it easily in 6 months.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Yep, me too! (worked well to improve tax liability from severance pay)
Crank up the contributions now, or just for your final few paychecks!
Retire Early, Retire often (it is hard to 'get-it-right' the first time)
Indeed you can. We were dealing with some tax issues in 2015 and needed to show lower income. I dumped so much into the 403(b) that my take-home pay was something like $150 a (2-week) pay period.
Thank you much, all, for the replies. Sounds good. So she's contributing 2K/mo now. I presume for the remaining 6 months she just doubles her contribution to 4K and hits her limit the last day she works Aug 1.
Yes you can. I retired on January 1 and kicked my vacation payout into my 403B. Since you work for a public agency check with your HR office and make sure you have it coordinated. Also check with your 403B provider and make sure your plan doesn't have restrictions on increasing contributions more than once in a year etc. There are some strange rules out there that employers come up with.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by NewbieHere
Severance pay maybe different. Same with bonus check. The tax is high.
I also used Section 179 (accelerated depreciation) for future 'Business expenses' during Severance payout year. Be sure to follow the rules... essentially I bought assets I could use, but were not apt to depreciate on resale value. I sold and recaptured the depreciation in a LOW income yr (You will have plenty of those years in the future)
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