Help your employees save enough for retirement.
Challenge: Financial experts predict you will need 80 percent of your current income to maintain your standard of living upon retirement. Qualified retirement-program limitations make it difficult for our employees to adequately save, so what can we do to help employees prepare for retirement?
Solution: To help your employees create a solid retirement path and adequately save for retirement, consider nonqualified deferred compensation 457 Plans, which include 457(b) and 457(f) plans. These plans allow flexibility, helping you design a plan that meets the needs of the organization and employees.
A few benefits for plan participants include:
- Opportunity to defer compensation in excess of qualified retirement plan limits on a pretax basis (457(b) only);
- The 457(f) plan allows plan sponsor contributions in addition to the 457(b) limits;
- Earnings accumulate tax deferred;
- The ability to make monthly changes in deferrals in 457(b) plans;
- Ability to design an individualized investment strategy;
- No 10 percent IRS early withdrawal penalty;
- The 457(b) plan allows a combined 2010 calendar year contribution of $16,500 for both the plan participant and the plan sponsor;
- The 457(f) plan allows plan sponsor contributions in addition to the 457(b) limits.
With nonqualified deferred compensation 457 Plans, you will not only be offering a valuable benefit, you'll also be able to recruit, retain, and reward employees.
Kim McVicker is a senior relationship manager for the Alliance Management Group at the Principal Financial Group, provider of the ASAE-Endorsed Retirement Solution. Email: [email protected]