My company offers deferred compaensation. In this plan, compensation is deferred for a specified period of time. The money sits in investments that I specify and grows tax-free. In my case, I have chosen bond funds. I have elected to start receiving equal payemnsts for five years, starting at age 55--before I would receive money from retirement accounts or my pension.
How should I treat this asset? It has elements of non-taxable and taxable investments.
Thanks!
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You can treat the withdrawals from your deferred comp as special receipts. best, Larry
In the case were deferred comp contributions come from salary reduction - how does one account for a reduction in current year taxable income?
It seems to me that entering special receipts accounts for the anticipated outflows as suggested above creates a discrepancy.
Am I missing something?
I have a similar question. I defer a portion of my salary into a non-qualified deferred compensation plan. The deferrals are taxed only for FICA and are a general liability obligation of the company and earn a plan stipulated return. Upon leaving the company I will be required to take levelized distribution over the time period I elected. I have inputed this in the model as a 401k etc. asset should I show the withdrawls as as "special withdrawl" to account for the elected withdrawl tenor?
You should enter your contributions as individual contributions to a 401(k) plan and specify the start date and last date of withdrawals. They will be taken out smoothly by the program. If you have two or more 401(k)s, you will need to use the special withdrawal screen as well to handle them all. best, Larry