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I know there are limits on retirement contributions, both pre-tax and after-tax; but I had a couple questions to make sure I understand how they apply precisely and manage them.

Background: I have two jobs, both full-time salaried, one pays twice a month, one pays once a month, one is private and one is "government"-ish (a state school). They both offer retirement and you can make contributions. Both are mid-six-figure and very close to each other in amount.

Questions: Is the ~$19k limit each year inclusive of both of them? Meaning I have to make sure that my contributions under each do not exceed that? And of course while we are at it, the limit of the after-tax. My gut says, yes but wasn't entirely sure. Does this limit apply to me and my wife separately or are we together bound to this single limit?

Now, which one would be better to contribute under? The private one or the "government" one? Or best to apply the "diversification" principle by contributing under both (being careful not to exceed the limits of course)? I just started the second one and there are a lot of parallels and considerations to make and I want to make sure I am doing it right, I don't want to end up screwed come end of year.

Appreciate whatever context you can share with me on this. Any resources to help maximize the benefits that I can read up on, would be awesome too. Thank you.

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Is the ~$19k limit each year inclusive of both of them? Meaning I have to make sure that my contributions under each do not exceed that? The limit is for the person that year.

if you have two jobs at the same time, or you quit a job part way though the year then the employee has to make sure they don't go over the annual limit. The employers will not know what you have contributed to each program.

And of course while we are at it, the limit of the after-tax. My gut says, yes but wasn't entirely sure.

The 401(K) or equivalent contribution limit includes Traditional and Roth. Some employers also allow post tax contributions that allow you to put additional money into the program. They may or may not match. You have to check with them to see what they do.

Now, which one would be better to contribute under? The private one or the "government" one? Or best to apply the "diversification" principle by contributing under both (being careful not to exceed the limits of course)?

Now if they both match then the contribution should be split to maximize the $'s received from the match. If they don't use the same formula the split could be something different than 50%-50%.

You should look at both of them and then decide how to allocate the funds within each program to meet your diversification plan. There generally isn't a reason why this government or private would be better. Some will have cheaper options, or more funds to pick from, but the only way to know is to check the details of each plan.

Does this limit apply to me and my wife separately or are we together bound to this single limit?

The marital status of the employee and the availability or not of the spouses retirement program has no impact on what the employee can contribute each year. They can each contribute the maximum into their 401(k) or equivalent.

When determining the deductibility of a traditional IRA, or the ability to contribute to a Roth IRA, the retirement situation of the spouse can play a role.

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  • I appreciate the detailed response, I did get one thing that I hadn't thought about was the matching, I know they both do but not sure how much the new one does. I was mostly concerned with the overall limit, which seems will apply and so I have to watch how much so I don't overcontribute. The rest I suspected as much and will of course look through the material to better understand that part, the ratio would not have been 50/50 either way but depends on what and how much they offer in each area. Thanks again. Jul 12 at 15:07

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