Question

joe works for the cleveland museum of art, which sponsors a 403(b) plan. if Joe is 45 years old and has worked for the museum for ten years, what is his maximum elective deferral for 2020?

a) $19,500

b) $26,000

c) $6,000

d) $7,000

Answer 1

The maximum amount an employee can elect to contribute out of salary to a 403 (b) retirement plan for 2020 is $19,500. since Joe is 45 years old that means he is lesser rhan 50 years. His maximum elective deferral to 403(b)plan would be limited to $19,500 and he has worked only 10 years .If he would have worked for additional 5 years (i.e 15 years) , he would have contributed $3000 extra. But since he has worked lesser and he is lesser than 50 years, the maximum elective deferral would be $ 19500.

So the correct answer would be (A) $ 19500