Can I Contribute to a 401k and a 403b?

It is possible to contribute to both a 401(k) and a 403(b) plan concurrently. This scenario often arises when an individual holds a job at a for-profit company offering a 401(k) and a second job at a non-profit organization, like a public school or hospital, that provides a 403(b). While contributing to both is permitted, it is governed by a single limit on how much an employee can personally contribute from their salary in a given year. The 401(k) is a common retirement plan for private-sector employees, while the 403(b) is for employees of public educational institutions and certain tax-exempt organizations.

The Combined Elective Deferral Limit

When contributing to both a 401(k) and a 403(b), the most important rule is the combined elective deferral limit. This limit, established under Internal Revenue Code Section 402, dictates the maximum you can contribute from your salary across all such plans in a single tax year. For 2025, this aggregate limit is $23,500, and it is the total you can contribute to all your 401(k) and 403(b) accounts combined. The responsibility for monitoring this combined limit falls on the employee, as each employer will only track contributions made to their specific plan.

For individuals age 50 or over, the rules allow for an additional catch-up contribution of $7,500 in 2025, increasing the total elective deferral limit to $31,000 for the year. A new provision effective in 2025 allows for a larger catch-up for those aged 60 to 63, who can contribute an additional $11,250. This brings their total potential contribution to $34,750, but you should verify if your plan documents have been updated to allow for this.

The Role of Employer Contributions

Employer contributions, such as matching funds or profit sharing, do not count toward your individual elective deferral limit. A different, much higher limit applies to the total contributions from all sources, known as the overall limit under Internal Revenue Code Section 415. For 2025, this cap is $70,000 and includes your elective deferrals, employer matching contributions, and other employer additions. For those 50 and over, this overall limit increases to $77,500 to account for their catch-up contributions. Your employers are responsible for ensuring their contributions do not cause you to exceed this overall limit for their specific plan.

Special 403(b) Catch-Up Provision

Beyond the standard age-based catch-up, 403(b) plans offer a catch-up opportunity based on years of service, which is not available to 401(k) participants. To be eligible, an employee must have completed at least 15 years of service with a qualified employer, such as an educational organization, hospital, or home health service agency. This special catch-up allows an eligible employee to contribute up to an additional $3,000 per year, with a lifetime maximum of $15,000 for these service-based contributions.

An employee who qualifies for both the 15-year service catch-up and the age 50+ catch-up can use both in the same year. When both are used, contributions made above the standard elective deferral limit are applied first to the 15-year catch-up limit until it is exhausted. Then, further contributions apply to the age 50+ catch-up limit.

Managing Contributions and Correcting Excesses

Actively managing your contributions is necessary when saving into both a 401(k) and a 403(b). You should regularly review your pay stubs from both employers to track your year-to-date contributions. As you approach the annual limit, you may need to coordinate with the HR or payroll departments at one or both jobs to adjust your contribution percentage and avoid an excess deferral.

If you accidentally contribute more than the combined elective deferral limit, it is important to correct the error promptly. You must notify one or both of your plan administrators and request a distribution of the excess amount, along with any investment earnings attributable to that excess. This corrective distribution must be completed by April 15 of the year following the over-contribution.

The tax consequences for failing to meet this deadline are significant. If the excess deferral is corrected on time, the excess amount is included in your taxable income for the year the contribution was made, and the associated earnings are taxed in the year they are distributed. If you miss the deadline, the excess contribution is subject to double taxation—it is taxed in the year it was contributed and then taxed again when you eventually withdraw it from the plan in retirement.