Retirement and deferred comp
Hello, I am 51 years old and have Deferred Comp Retirement plan 2035, through my employer. Should I invest more money there or get a Roth IRA? Thank you.
Terry Says
The deferred comp is a sort of “gift’ from your employer — and an incentive to stick around. Deferred comp plans come in two forms — qualified and non-qualified. If non-qualified, then these amounts are not protected if the employer goes bankrupt.
And when you take out deferred comp it is treated as ordinary income. The assumption is that the payout will come when you are in retirement, and potentially in a lower tax bracket. But you should study the terms of your deferred comp plan.
And I do think it would be wise to put as much money as possible, depending on your age, into a Roth IRA at a place like Fidelity or Vanguard. That will diversify your retirement assets, even though you won’t get a deduction for your contribution. Invest wisely.
