Maximizing Retirement Savings with Multiple Employers

By: Wilkins Miller Wealth Management

Do you have multiple employers or have a single employer and self-employment income? You may be able to contribute significantly more than the annual limits towards retirement.

There is a possibility that some individuals are eligible to be covered by two plans.

Typically, they are either:

– an employee of two separate businesses (each of which provides a 401(k) or similar defined contribution plan)
– an employee of one business that provides such a plan and also has a side job that generates self-employment income and therefore allows them to setup their own employer retirement plan

There are two contribution limitations to consider:

– IRC Section 402(g) limits the employee pre-tax contribution. This salary deferral limit is per taxpayer across all DC plans. For 2020, this limit is $19,500 (w/ $6,500 catch-up).
– IRC Section 415(c) limits the total contributions, employee and employer. However, this limit applies to each plan separately. For 2020, this limit is $57,000 (the plans cannot be a part of a control group or an affiliated service group).

The views contained herein are not to be taken as an advice or a recommendation from Wilkins Miller Wealth Management, LLC. This material does not contain sufficient information to support an investment or financial planning decision and it should not be relied upon by you in evaluating the merits of any such decision. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted.