Roth 401k / 457 Phase-Out Range

[shawnhaywood]

For 2023, my wife and I are over 50 and will contribute approximately $53k in our employers Roth 401k and Roth 457.  It looks like our gross income will be approximately $225k. Does this put us in the phase-out range? If so, what does that mean? Some reading online states that if we meet our plans eligibility requirements, we can participate regardless of income.  Is that so?

[dmertz · Accepted solution]

There is no MAGI-based phase-out range for Roth 401(k) or Roth 457(b) contributions.  Phase out based on MAGI only applies to Roth IRA contributions.  401(k)s and 457(b)s are not IRAs.

[shawnhaywood]

Thank you for replying. Does that mean we can contribute the maximum contributes during the year regardless of our income level?

[dmertz]

As I said, there is no restriction on 401(k) or 457(b) contributions that is based on the Adjusted Gross Income reported on your tax return.  Your employer's plans will dictate the amount that you are able to contribute from each paycheck and the contributions must stop when the total for the year reaches the overall statutory maximum.

https://www.irs.gov/retirement-plans/how-much-salary-can-you-defer-if-youre-eligible-for-more-than-o...

[shawnhaywood]

Thanks for the help.  I was concerned since my wife and I work for different employers and they don't know our combined income. You helped me understand, it's not our combined income, but rather each plans limits.  Thanks.