Why do I need to make my deferral election in the year before I actually would receive the compensation?

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This is required by the tax laws and rules that govern nonqualified deferred compensation. These include Section 409A of the Internal Revenue Code. Improperly deferred compensation will land you a 20% penalty plus interest, along with regular taxes on the …

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More FAQs

Is it better to elect distributions as a lump sum or as an installment over a period of years, like an annuity?

Which is better: a class-year plan or an account-based plan?

What are class-year plans and account-based plans for deferrals and distributions?

What is a laddering or bucket approach to distributions?

If I am not certain about when I should take my distributions, when should I elect to receive them?

How much of my compensation should I defer?

Can I at least change my distribution election when I lose my job?

Can I elect a different timing for just a part of my already scheduled future distributions, or must my subsequent deferrals all be treated the same?

How do I change the timing or form of my distribution?

Can I (or my company) fix a tax mistake I made in deferring my income or in the distribution without being penalized?

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