Modify word in the Deferred Compensation Plan effortlessly

Aug 6th, 2022
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How to Modify word in the Deferred Compensation Plan

4.8 out of 5
31 votes

if youre a high earner and you have the option of contributing to a deferred comp plan through work then this episode is for you and I think youre going to find it extremely helpful because over the next few minutes what were going to do is were going to break down what a deferred comp plan is how it compares to other retirement savings options and then some key considerations you need to know so that you can use your deferred comp plan to supercharge your retirement this is another episode of ready for retirement Im your host James canal and Im here to teach you how to get the most out of life with your money and now on to the episode theres lots to break down today and Im excited for this episode because you dont typically see a ton of good information on how to make the most of your deferred comp plan so lets jump in but before we do want to quickly highlight the review of the week this comes from username thinking listener 5 star review and thinking listener says if you w

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If you have a qualified plan and have passed the vesting period, your deferred compensation is yours, even if you quit with no notice on very bad terms. If you have a non-qualified plan, you may have to forfeit all of your deferred compensation by quitting depending on your plans specific terms.
Retirement plans and employee pensions are examples of deferred compensation. Employers usually withhold a fraction of employees compensation every month, accumulate it over time, and pay the lump sum amount on a date previously agreed upon in the employment contract.
If your deferred compensation comes as a lump sum, one way to mitigate the tax impact is to bunch other tax deductions in the year you receive the money. Taxpayers often have some flexibility on when they can pay certain deductible expenses, such as charitable contributions or real estate taxes, Walters says.
If people are not comfortable leaving deferred compensation in the hands of their employer, pre-retirement distributions allow them to protect their money by withdrawing it from the plan, paying tax on it, and investing it elsewhere.
Your employers 457(b) deferred compensation plan has no effect on the benefits you will receive from Social Security. Your Social Security contributions and benefits (if applicable) will be based on your total pay, including the amounts paid into the deferred compensation plan.
Based upon your plan options, generally, you may choose 1 of 2 ways to receive your deferred compensation: as a lump-sum payment or in installments.
Like your 401(k), deferred compensation is a vehicle to help defer taxable income and reduce current tax liabilities. The income you defer is invested over time and disbursed in retirement when you likely are in a lower tax bracket.
A 401(k) plan that includes a matching contribution from an employer is a form of deferred compensation. It is an addition to a regular salary that is payable only after the employee leaves the company or retires.

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