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Section 409A specifies that unless any deferred compensation falls into a specified set of "qualified deferred compensation" categories, the IRS will automatically consider it unqualified deferred compensation. The qualified deferred compensation categories are: Qualified employer plans (these are basically employer retirement plans)
The 457 plan is a type of nonqualified, [1] [2] tax advantaged deferred-compensation retirement plan that is available for governmental and certain nongovernmental employers in the United States. The employer provides the plan and the employee defers compensation into it on a pre tax or after-tax (Roth) basis.
Required minimum distributions (RMDs) are minimum amounts that U.S. tax law requires one to withdraw annually from traditional IRAs and employer-sponsored retirement plans and pay income tax on that withdrawal. In the Internal Revenue Code itself, the precise term is "minimum required distribution". [1]
Penalty-free withdrawals can be taken from an IRA if you’re unemployed and the money is used to pay health insurance premiums. The caveat is that you must be unemployed for 12 weeks.
An IRA offers useful benefits when it comes to saving for retirement – especially the ability to save on a tax-advantaged basis – if you stick to the rules.
While technically "deferred compensation" is any arrangement where an employee receives wages after they have earned them, the more common use of the phrase refers to "non-qualified" deferred compensation and a specific part of the tax code that provides a special benefit to corporate executives and other highly compensated corporate employees.