Why Choose A Non-Qualified Retirement Plan?
With an eye toward future retirement concerns, choosing the right retirement plan is important, “Why choose a non-qualified retirement plan?”
Retirement is supposed to be that time of life when everything is easier and a person can kick back and come and go as they please and do nothing all day if they want and travel and thoroughly enjoy life. It is supposed to be. Planning for retirement is essential for making that dream come true. So, why choose a non-qualified retirement plan?
Why choose a non-qualified retirement plan?
These plans are exempt from traditional qualified retirement plans in that they can be selectively offered to employees. Since they are not required to be offered to all employees they can be used as an incentive to certain members of staff such as executives for encouraging greater productivity.
Categories of this plan
There are two different categories that are used for this plan: supplemental executive retirement plans where the employer contributes funds, and deferred savings plans that receive their funding from the employee.
Benefits of plans
A deferred savings plan works like a 401k in that the employee designates a portion of his earnings to be placed in this plan through payroll deductions and are tax exempt until they are withdrawn by the employee. As with any savings account they will earn interest on top of the contributions.
Benefits of SERPs
Supplemental executive retirement plans are fully funded by the employer. Like any other pension plan the benefits can be distributed to the retiree along with other retirement plans that they may be a part of.
Why choose a non-qualified retirement plan?
If you have the choice, this option will be an added tool in your retirement plan since they can be added on top of other plans that you may have.
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