Quiz 10: Section 457 Plans

Business

There is no answer for this question

Deferred Compensation Plan refers to the plan that provides an option to participants to keep their income accumulated with employer and to receive them after a certain period of time. The main purpose behind deferring of plan compensation is to let the money get accumulated so that a lump sum is made available to participant after a time period which is generally after retirement so as to ease his burden of expenses. Apart from this, deferring of plan compensation also provides tax benefit to the participant as no tax is charged in the year the amount is deferred rather only when the amount is distributed during the retirement when the tax bracket gets lower for a senior citizen plus the income also reduces because of permanent termination from workforce. Thus, the purpose of deferring of plan money is basically  future income availability  and  tax advantages  associated with it.

There is no answer for this question

Related Quizzes