Nys Deferred Comp Early Withdrawal Penalty In Virginia
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Multi-State
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US-00418BG
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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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Unlike many retirement savings plans, there is generally no early withdrawal penalty for distributions from the plan. Thinking of tapping into your retirement savings early?In addition, unless conditions for early withdrawal are met, there may be a tax penalty. The Early Withdrawal Calculator (the "tool") allows you to estimate the impact of taking a hypothetical early withdrawal from your retirement account. The distribution from the Plan is subject to state and federal income tax, but is not subject to an early withdrawal penalty.