Yes, you can contribute to both a 403(b) and a 457(b) in the same year, and they have separate contribution limits

If your employer offers both plans, you are allowed to put money into each one during the same calendar year. The 403(b) and 457(b) are treated as completely separate retirement accounts by the IRS, which means the contribution limit for one does not reduce the limit for the other. This is different from how 401(k) plans work — if you have access to both a 403(b) and a 457(b), you get to use the full annual limit for each.

The catch is that you need to have access to both plans through your employer. Most people in 403(b) plans work for nonprofits, schools, or hospitals. Most people in 457(b) plans work for state or local government. Some employees — particularly those in certain government agencies or large nonprofits — may have genuine access to both, which is when this rule matters.

Key Takeaways

  • The IRS treats 403(b) and 457(b) contributions as separate, so you can contribute the full limit to each plan in the same year without one reducing the other.
  • For 2024, you can contribute up to $23,500 to a 403(b) and up to $23,500 to a 457(b) if you have access to both.
  • Catch-up contributions (available at age 50 or after 15 years of service) explore to each plan independently.
  • Your employer must offer both plans and allow you to enroll in both — having access to two different employers' plans does not count.
  • Contributions to each plan reduce your taxable income separately, so you get the tax benefit from both.

How the contribution limits work when you have both plans

Each plan has its own annual contribution limit set by the IRS. For 2024, the standard limit is $23,500 for both 403(b) and 457(b) plans. If you contribute $15,000 to your 403(b), you can still contribute the full $23,500 to your 457(b) — the $15,000 you put into the 403(b) does not count against your 457(b) limit.

This is one of the few situations where the IRS lets you max out two different retirement plans in a single year. The reason is that 403(b) and 457(b) plans serve different groups of workers and have different rules, so the IRS treats them as distinct for contribution purposes. If you had a 401(k) and a 403(b) with the same employer, by contrast, the limits would combine — you could not put $23,500 in each.

The contribution limits change each year based on inflation. The IRS typically announces the new limits in October for the following year. If you are planning to contribute to both plans, check your employer's payroll system or benefits website in January to confirm the current year's limits.

Catch-up contributions and special rules for each plan

If you are age 50 or older, you can make catch-up contributions to both plans. For 2024, the catch-up amount is $7,500 for both 403(b) and 457(b) plans. This means a 50-year-old could contribute up to $31,000 to a 403(b) ($23,500 + $7,500) and $31,000 to a 457(b) in the same year.

The 403(b) has an additional catch-up option called the 15-year service catch-up. If you have worked for your employer for at least 15 years and have not maxed out contributions in prior years, you may be able to contribute an extra $3,000 per year (up to a lifetime limit of $15,000). This catch-up is separate from the age-50 catch-up and applies only to 403(b) plans, not 457(b) plans.

A 457(b) plan has its own special rule: if you are within three years of your plan's normal retirement age, you can double your contribution limit for those years. This is called the 457(b) catch-up and is not available in 403(b) plans. These rules do not interact — each plan's catch-up rules stand on their own.

Tax treatment when contributing to both plans

Contributions to both 403(b) and 457(b) plans are made with pre-tax dollars, meaning the money comes out of your paycheck before federal income tax is calculated. If you contribute $500 per paycheck to each plan, your taxable income is reduced by $1,000 that pay period, not just $500.

When you file your tax return, your employer reports contributions to each plan separately on your W-2 form. The 403(b) contributions appear in Box 12 with code D, and 457(b) contributions appear in Box 12 with code H. Both reduce your taxable income on your federal return, so you get the full tax benefit from both plans.

State income tax treatment varies by state. Most states that have income tax treat both 403(b) and 457(b) contributions the same way as the federal government — they reduce your state taxable income. A few states have different rules, so check your state's tax guidance or ask your employer's benefits office if you live in a state with income tax.

When your employer must allow both plans

Your employer is not required to offer both a 403(b) and a 457(b) plan. Many nonprofits offer only a 403(b). Many government agencies offer only a 457(b). Some larger organizations, particularly state universities and large government agencies, offer both.

If your employer does offer both plans, you have the right to enroll in both and contribute to both. Your employer cannot force you to choose one or the other. However, your employer can set rules about how you enroll — for example, they might require you to enroll through their benefits portal or during open enrollment. Check your employee handbook or benefits website to see if both plans are available to you.

If you work for two different employers — one that offers a 403(b) and one that offers a 457(b) — you can contribute to both, but each contribution limit applies to that employer's plan only. You cannot combine limits across employers. For example, if you contribute $20,000 to your nonprofit employer's 403(b) and $20,000 to your government employer's 457(b), you are within both limits and owe no penalty.

Withdrawal rules differ between the two plans

Even though you can contribute to both plans, the rules for taking money out are different. A 403(b) generally requires you to be age 59½ or to have left your job before you can withdraw without a 10 percent early withdrawal penalty. A 457(b) allows you to withdraw without penalty once you have separated from service, regardless of age.

This difference matters if you are planning to retire before age 59½. If you have both a 403(b) and a 457(b), you could withdraw from the 457(b) penalty-free when you leave your job, even if you are younger than 59½. The 403(b) money would remain locked until you reach 59½ unless you use a specific exception like the Rule of 55 (if you left your job at 55 or later).

Both plans require you to begin taking distributions at age 73 (as of 2023, under the find 2.0 Act). If you have both plans, you must take required minimum distributions from each plan separately, though some plans allow you to aggregate the calculation.

Common mistakes when managing both plans

The most common mistake is assuming that contributions to one plan reduce the limit for the other. They do not. If you max out your 403(b) and think you cannot contribute to your 457(b), you are leaving money on the table. Each plan has its own limit, and you can use both in full.

Another mistake is not updating your payroll deduction when the annual limit changes. If you set up automatic contributions of $2,000 per paycheck to each plan and the limit increases, you might not be contributing as much as you could. Review your contribution amounts each January to make sure you are still on track to reach your goals.

A third mistake is forgetting that catch-up contributions explore separately. If you are age 50 and have 15 years of service at a nonprofit with a 403(b), you might be able to use both the age-50 catch-up and the 15-year service catch-up on the 403(b), while also using the age-50 catch-up on a 457(b) if your employer offers one. Many people do not realize they have this option.

Frequently Asked Questions

Do I have to contribute the same amount to both plans?

No. You can contribute any amount to each plan, as long as you do not exceed that plan's annual limit. You might contribute $10,000 to your 403(b) and $23,500 to your 457(b), or vice versa, or any other combination. Each plan is independent.

What happens if I contribute too much to both plans?

If you exceed the limit for one plan, your employer should catch the error and return the excess contribution to you, usually with earnings. If excess contributions are not caught and corrected by the end of the year, you may owe taxes and penalties. Ask your benefits office to review your contributions if you are unsure whether you are within the limits.

Can I roll over money from one plan to the other?

Generally, no. A 403(b) and a 457(b) are separate plan types, and the IRS does not allow direct rollovers between them. However, you can roll a 457(b) to an IRA, and you can roll a 403(b) to an IRA or another 403(b). Talk to your plan administrator about your options if you are changing jobs or retiring.

If I leave my job, what happens to money in both plans?

The money stays in each plan unless you withdraw it or roll it over. You can leave the money invested, take distributions, or roll it to an IRA. The 457(b) allows penalty-free withdrawals after separation, while the 403(b) generally requires you to wait until 59½ unless you meet an exception.

Does contributing to both plans affect my Social Security benefits?

No. Contributions to 403(b) and 457(b) plans do not reduce your Social Security benefits. Social Security is based on your earnings history and the age you claim, not on retirement plan contributions.