The “Potential Double Max” Advantage: A Unique Retirement Savings Opportunity for University Faculty

Many university professionals have access to retirement benefits that simply don’t exist in most corporate workplaces. One of the most powerful, and often misunderstood, is the ability, at some universities, to contribute to both a 403(b) plan and a 457 plan. When available together, these plans can help create a “double max” opportunity that can allow faculty and senior administrators to defer significantly more than the typical 401(k) limit each year. 

It’s important to start with a caveat: not all universities offer a 457 plan, and plan designs vary widely across institutions. That said, for those who do have access to both plans, the planning potential is worth understanding. 

This benefit is different in higher education 

In most private-sector roles, employees are limited to a single primary salary-deferral plan, usually a 401(k). In higher education, it’s common for faculty to have access to a 403(b), and at many institutions (public and some private), a 457 plan as well. Unlike a 401(k), these two plans often have separate annual deferral limits, allowing eligible participants to contribute to each independently.

This distinction creates the potential “double max,” but only if the 457 plan is available and allows employee contributions. 

For 2026, the standard employee deferral limit for both 403(b) and 457 plans is $24,500 per plan. At universities that offer both options, this creates the potential to contribute up to $49,000 annually by maxing out each plan separately. This is what’s often referred to as the “double max” opportunity, a savings advantage that’s largely unique to higher education, though it’s important to note that not every university offers a 457 plan. 

For individuals who are age 50 or older by the end of the year, the IRS allows a standard catchup contribution of $8,000 per plan, subject to plan rules. In that case, the maximum contribution increases to $32,500 in a 403(b) and $32,500 in a 457 plan, (the contribution amount for a 457 plan is less for private universities) for a combined total of up to $65,000 in 2026 for those with access to both plans and eligible for catchups. 

Recent legislation also introduced an enhanced catchup opportunity for individuals ages 60 through 63, increasing the catchup amount to $11,250 per plan, again depending on plan design. For those in this age band, total contributions can reach $35,750 in a 403(b) and $35,750 in a 457 plan, allowing for a combined total of up to $71,500 in a single year. 

Some universities also offer a 401(a) plan, often funded through mandatory employer and/or employee contributions. These contributions are typically not voluntary and generally do not reduce your ability to defer salary into a 403(b) or 457 plan. In other words, 401(a) contributions are allowed in addition to the voluntary contributions of the 403(b) and 457 plans giving you the ability to save money for your future on a tax advantaged basis. 

Pre-tax vs. Roth 

Once you see the potential impact of the “double max,” and how much you may be able to save each year, the next question naturally becomes how you want those dollars to work for you. Many 403(b) and 457 plans allow contributions on either a pretax or Roth basis, up to the same annual limits.  

When deciding between pretax and Roth, it’s worth weighing: 

• Your current income and marginal tax bracket 

• Expectations for future tax rates, including potential legislative changes as well as changes to your overall income in retirement 

• How much flexibility you want across taxable, tax-deferred, and tax-free assets 

• Your legacy goals 

Roth workplace plans vs. Roth IRAs 

High-earning faculty frequently run into income limits that restrict or eliminate direct Roth IRA contributions. By contrast, the ability to contribute Roth dollars inside a 403(b) or 457 plan is not reduced based on income, assuming the plan offers a Roth feature. This distinction surprises many faculty and can create additional planning opportunities even when Roth IRAs are off the table.  

Legacy planning: Family vs. Charity 

One question university professionals often overlook is what happens if you don’t use all of what you’ve saved for retirement. If unused retirement assets are likely to pass primarily to family, Roth balances can be more attractive, since heirs can generally continue to receive tax-free growth for up to 10 years after your death under current rules. On the other hand, if a significant portion of your retirement savings is ultimately intended for charity, pretax contributions may be more efficient. You may receive the tax benefit today, and qualified charities can receive those assets without paying income tax. Neither approach is universally right or wrong but aligning how you contribute during your career with how you expect unused assets to be distributed later is an important, and frequently missed, part of retirement planning. 

University professionals often have access to retirement benefits that are meaningfully different, and in many cases more powerful than what’s available outside of academia. When you take the time to do a bit of “homework” and understand which plans your institution offers, how the contribution limits work, and how pretax and Roth options fit your goals, those benefits can add up. 

Our perspective 

At Savant Wealth Management, we specialize in working with university professionals and helping them navigate the unique benefits, limitations, and planning opportunities that come with academic retirement plans. Because these plans vary widely by institution, understanding what options are available, and how they fit into your broader financial and legacy goals, can make a meaningful difference over time. If you’d like to better understand your university’s retirement benefits and how to use them strategically, we’d be happy to connect and walk through your options together.