Deferred Compensation Plan For Small Business In Houston
Category:
State:
Multi-State
City:
Houston
Control #:
US-00418BG
Format:
Word;
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Deferred compensation is an arrangement in which a portion of an employee's income is paid out at a date after which the income is actually earned. A Deferred Compensation Agreement is a contractual agreement in which an employee (or independent contractor) agrees to be paid in a future year for services rendered. Deferred compensation payments generally commence upon termination of employment (e.g., retirement) or death or disability before retirement. These agreements are often geared toward anticipated retirement in order to provide cash payments to the retiree and to defer taxation to a year when the recipient is in a lower bracket. Although the employer's contractual obligation to pay the deferred compensation is typically unsecured, the obligation still constitutes a contractual promise.
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The City of Houston 457 Deferred. Compensation Plan is a powerful tool to help you reach your retirement dreams.Create a Plan Document: Establish the terms of your plan, including contribution limits, investment options, and loan provisions. Deferred compensation plans allow a worker or employee to earn a W2 wage, bonuses and other compensation in a certain year and receive earnings in another. An executive deferred compensation plan allows highincome employees to put off paying taxes on part of their income until retirement. A nonqualified deferred compensation plan can reduce your taxable income, but there are risks to consider. A nonqualified deferred compensation (NQDC) plan is an agreement between employers and employees to pay them in the future. Deferred compensation agreements exist throughout the business world as an effective strategy to attract, reward and retain top leaders and talented workers. It's designed to be a supplement to your pension and is an additional way to invest long-term directly from your pay.