| Deferred compensation can provide you a tax shelter, a supplemental retirement plan and a flexible investment program.
When you use deferred compensation, you defer a portion of your wages in an account on a pre-tax basis. This means the money is set aside before you pay taxes on it so by contributing to the plan you are actually lowering the taxes currently due on your base pay.
Additionally, the money the account earns is tax-deferred, meaning that it is not taxed until later, when you withdraw the money. Often at retirement, you are in a lower income tax bracket, which may reduce the tax you pay on your money.
In most cases, you control how the deferred compensation account is invested. Then, when you retire or separate from service, this money and the money it has earned is returned to you in a payout form that you choose, depending on your situation.
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ICMA Retirement Corporation
ICMA-RC is a not-for-profit corporation founded in 1972 by public sector employers though the International City/County Management Association and supported by a Ford Foundation grant. In accordance with its corporate charter, ICMA-RC assists in the establishment and maintenance of retirement plans exclusively for state and local government employers.
ICMA-RC offers a broad range of investment. Investors can choose from a range of funds - from aggressive growth to money markets. To diversify investment risk, the investment program employs multiple managers with different styles for its actively managed fund options.
ICMA Retirement Corporation Plan details and options are available online at www.icmarc.org.
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