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Ten Key Features Of Nonqualified Deferred Compensation

When you are saving for retirement, a nonqualified deferred compensation (NQDC) plan is one of the few choices for meaningful tax-deferred investing. This article highlights 10 key features of NQDC plans that make them valuable to both participants and companies.

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Key Points in This Article
Nonqualified deferred compensation is a well-established and popular vehicle for tax-deferred investing and retirement savings. Participants can set aside much more pre-tax income than they can with qualified plans, such as a 401(k).
Companies usually finance plans and sometimes match a participant's deferred amounts. The use of a rabbi trust can help to protect participants' distributions.
Distributions offer flexibility. Payouts can be scheduled for retirement or taken while you are still working.