Should I Max Out 401(k), 457(b), or 403(b) Contributions?
By Jared Andreoli, CFP®, CSLP®
Saving as much money as possible to give yourself the retirement you want makes a lot of sense. So you might be wondering if you should max out 401(k), 457(b), or 403(b) contributions.
In general, you’d do your future self a favor to contribute the maximum allowed to your retirement accounts, building a comfortable nest egg for your retirement. However, the amount you save to each account annually is a personal decision you should make with a financial planner.
If you’ve ever asked yourself, “Should I max out 401(k), 457(b), or 403(b) contributions?”—you’re not alone. It’s a common question among high-earning professionals, particularly those in the medical field, who want to maximize their retirement savings.
At Simplicity Financial LLC, we help physicians, from those just out of residency to experienced professionals at institutions like Marshfield Clinic Health System and the Medical College of Wisconsin, understand how to align their retirement contributions with their broader financial goals.
Let’s take a closer look at what maxing out your retirement accounts really means—and how to decide if it’s the right move for you.
What to Know About Your Retirement Accounts
Here’s a quick overview of each type of retirement plan.
Your 401(k)
A 401(k) is an employer-sponsored retirement account that allows you to contribute a percentage of your salary before taxes are taken out. An employer may match a portion of your contribution. You select your investments, and your money can grow tax-deferred.
Your 403(b)
The 403(b) is like a 401(k), except it is for employees of nonprofits and tax-exempt organizations, such as hospitals and schools. However, the investment choices might be more limited than they are with a 401(k).
Your 457(b)
A 457(b) is a retirement plan offered to employees of nonprofits and state and local governments. It’s similar to the 401(k) and 403(b) in taking pre-tax dollars, but it has some differences in contribution limits and early withdrawal penalties.
All three retirement plans have the same IRS limit on annual contributions ($23,500 for 2025). Whether you can contribute the annual maximum allowed to a 401(k), 457(b), and 403(b) depends on whether you have all three accounts or some combination.
Beyond what’s allowed, your consideration might turn to your financial goals. Do you have student loans? Do you want to save for a home? Do you need to build an emergency fund?
Should I Max Out 401(k) and 403(b) Contributions?
If you own a 401(k) and 403(b), your annual contribution allowed is a combined total of $23,500 if you’re under 50. If you’re over 50, the combined maximum is $31,000 or $34,750 if you’re between 60 and 63 with catch-up contributions. You can contribute to both a 401(k) and a 403(b) in the same year, but you can’t max out each one individually. The IRS sets a combined contribution limit across all elective deferrals.
Both plans allow employer contributions. So while you can’t max out your 401(k) and 403(b), you can accumulate a combined total of $70,000 annually between the accounts with employer contributions.
Should I Max Out 457(b) Contributions?
The 457(b) has a separate limit from the 401(k) and 403(b). When you consider if you should max out 401(k), 403(b), or 457(b) contributions, the game changes in your favor if you have a 401(k) and 457(b), like at the Marshfield Clinic Health System, or a 403(b) and 457(b), like at the Medical College of Wisconsin.
With the ability to save the maximum in both retirement accounts, you can put away $47,000 ($23,500 in each account) of your annual salary in 2025—more if you’re over 50. The 457(b) also has no 10% penalty for withdrawing money before age 59½, which applies to the 401(k) and 403(b).
Talk to Simplicity Financial LLC About Maxing Out Retirement Plans
Are you unsure if you should max out 401(k), 457(b), or 403(b) contributions? To find the right answer, ask Simplicity Financial LLC. We assist physicians, fellows, and residents with financial planning to meet their financial goals.
Get started by scheduling a free consultation, or reach out to us by emailing jared.andreoli@simplicityfinancialllc.com or calling 414-207-6473.
About Jared
Jared Andreoli, CFP®, CSLP®, is president and financial planner at Simplicity Financial, a fee-only RIA dedicated to helping early-career physicians conceptualize their financial picture and achieve their financial goals. Jared specializes in devising individualized financial road maps for clients, and he loves nothing more than a full day meeting with clients who value his partnership to solve problems—big and small.
After college, Jared spent six years working as a mutual fund administrator for a large company. While he learned an immense amount about the financial world, he was missing the personal connection of working with individual clients. Combining his passion for finance and personal connection, he established Simplicity Financial in 2017.
Jared has a degree in finance with a concentration in financial planning from Western Kentucky University, along with the CERTIFIED FINANCIAL PLANNER®, CFP® and a Certified Student Loan Planner (CSLP®) certifications. Outside of work Jared enjoys cooking and traveling. He played baseball in college and still coaches occasionally. He and his wife recently welcomed a daughter, who occupies most of their time. To learn more about Jared, connect with him on LinkedIn.