Financial Planning : Basics

Articles

Your Company’s NQDC Plan: What You Must Understand To Maximize Its Value

by Bruce Brumberg

With nonqualified deferred compensation, your company lets you defer more than you can contribute to your 401(k). Here’s what you need to know.

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FAQs

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

Assuming they are able to elect the distribution type for retirement, some executives prefer to…

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What other factors should I consider before I participate? For example, if my income tax rates will be higher or lower in the future, does it make sense to defer my income?

When you run the numbers and consider when the taxes are taken out, most of the time the future value from the tax-deferred growth of your compensation, and investment earnings on it, will…

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More FAQs:

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?

How does NQDC fit with my other company benefits?

UPDATES! How do I fit nonqualified deferred compensation into my financial plan?

When I retire, or when I reach the age when I thought I would retire, what happens with my NQDC distributions?

UPDATED! Is there any way to guarantee I will receive my money and yet still defer taxes?

How can I coordinate my stock grants and my deferred compensation program to help maximize my financial well-being?

Should I participate in my 401(k) or 403(b) plan before my employer’s NQDC plan?

UPDATED! My tax rates are likely to rise in the future. Can I change my deferral election and instead receive the money this year? Similarly, can I move a scheduled future income distribution into this year?

What is an in-service distribution?

UPDATES! What are the 2025 IRS contribution limits for qualified retirement plans that affect nonqualified deferred compensation?

How do the taxes under the Affordable Care Act affect my Medicare tax rate and my planning for nonqualified deferred compensation?

Is there a distribution-election strategy when I’m uncertain in the intermediate term about my own cash flow and the company’s finances?

UPDATES! What are the most recent tax changes that affect nonqualified deferred compensation?