Ask Terry Questions Where to start on deferred comp

Where to start on deferred comp

By Terry Savage on July 26, 2013 | Investments

I have a deferred comp account and I would like to know where to start on educating myself on how to manage it. My last statement said my investments grew 4.5% .

SAVAGE SAYS: Do you have an actual deferred comp account at the company where you work If so, they probably don’t give you any choices on how it is invested, or perhaps you have a choice between company stock, an index fund, and a fixed rate. Ask your company HR department if there are investment choices in this account. Remember, a deferred comp account is very different from a 40l(k) or other qualified retirement plan. A deferred comp account is not covered by the same guarantees as a retirement plan. Instead you are a general creditor of the company!

You should also know exactly when you can take this deferred comp. Do you have to wait until you leave the company The HR department should fill you in on this. But make sure that you are really talking about deferred comp — and not some type of retirement plan.



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