Harris Texas Deferred Compensation Investment Account Plan

State:
Multi-State
County:
Harris
Control #:
US-CC-20-146
Format:
Word; 
Rich Text
Instant download

Description

20-146 20-146 . . . Deferred Compensation Investment Account Plan under which Board of Directors of Savings and Loan Association allocates a portion of annual bonuses which would otherwise be paid to selected officers and employees to a separate account. The deferred compensation in such account is deemed, for purposes of Plan only, to represent specified percentages of Association's investments in certain portfolios of equity securities, and it is increased or decreased to same extent as performance of such securities

The Harris Texas Deferred Compensation Investment Account Plan is a retirement savings program offered to eligible employees of Harris County, Texas. This plan allows employees to defer a portion of their salary into an investment account, which can then grow on a tax-deferred basis until retirement. The Harris Texas Deferred Compensation Investment Account Plan offers several investment options, allowing employees to choose the allocation that best suits their individual needs and risk tolerance. These investment options include stocks, bonds, mutual funds, and other investment vehicles. Participants have the flexibility to change their investment selections periodically, ensuring their portfolio aligns with their long-term goals and market conditions. One of the key benefits of the Harris Texas Deferred Compensation Investment Account Plan is its tax advantages. Contributions made to the plan are tax-deferred, meaning that employees do not pay taxes on the portion of their salary that is deferred. Taxes on the contributions and any investment gains are only paid when the funds are withdrawn, typically during retirement when the individual may be in a lower tax bracket. Additionally, the plan offers a range of services and resources to educate participants on retirement planning and investment strategies. This includes access to financial advisors who can provide personalized guidance to help employees make informed decisions about their investments. While there may not be different types of Harris Texas Deferred Compensation Investment Account Plans per se, there could be variations in terms of contribution limits or employer matches, based on specific employment classifications or bargaining agreements. However, the core features and benefits of the plan are generally consistent for all eligible employees. In summary, the Harris Texas Deferred Compensation Investment Account Plan provides a valuable opportunity for employees to save for retirement on a tax-advantaged basis. By offering a range of investment options and access to resources, it empowers participants to make informed decisions and create a customized portfolio suited to their financial goals.

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FAQ

Early Withdrawals from a 457 Plan Money saved in a 457 plan is designed for retirement, but unlike 401(k) and 403(b) plans, you can take a withdrawal from the 457 without penalty before you are 59 and a half years old. This is a very important rule that often times goes overlooked with the 457 plan.

The main distinguishing factor between 457 and 401(k) is how the retirement plan is offered. 457 plans are common in government entities such as state governments, as well as non-profit organizations. In contrast, 401(k)s are offered by private companies to their employees.

The 457 plan is a retirement savings plan and you generally cannot withdraw money while you are still employed. When you leave employment, you may withdraw funds; leave them in place; transfer them to a 457, 403(b) or 401(k) of a new employer; or roll them into an Individual Retirement Account (IRA).

The advantages of a 457b are contributing more to retirement and early withdrawals. 457b disadvantages are the potential for limited investment choices and tax implications of lump-sum distributions.

Earnings accumulate on a tax-deferred basis, and distributions are tax-free if made five years after the initial contribution to the plan and the employee is over 59½.

Unlike other retirement plans, under the IRC, 457 participants can withdraw funds before the age of 59½ as long as you either leave your employer or have a qualifying hardship. You can take money out of your 457 plan without penalty at any age, although you will have to pay income taxes on any money you withdraw.

2022 The 403(b) has a much higher limit than the 457(b), which lacks a separate contribution limit for employers. 457(b)s only allow $20,500 in contributions from any source in 2022, whereas 403(b)s allows total contributions of $61,000, including $20,500 from an employee.

For employees, the key benefit of a 457 plan is that the savings are tax-deferred: Contributions are made on a pre-tax basis, reducing taxable income and growing tax-deferred until withdrawal. 457 plans also have the advantage of catch-up options. Employees over age 50 can contribute on top of the limit for the year.

For example, the Internal Revenue Code (IRC) allows for 401(k) withdrawals to begin penalty-free after age 59½but the IRC also requires that you start taking distributions at age 72. By contrast, there are no IRC age restrictions on distributions from a deferred compensation plan.

A 457(b) plan is an employer-sponsored, tax-favored retirement savings account. With this type of plan, you contribute pre-tax dollars from your paycheck, and that money won't be taxed until you withdraw the money, usually for retirement.

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Distributions from a tax-deferred retirement plan may be taxable as ordinary income. Deferred compensation funds are set aside and can earn a return on investment until the time they're paid out to the employee.Learn more about this governmental plan for state or local employees. Employees may choose to participate in the Deferred Compensation Plan provided for in Internal Revenue Code Section 457. During this session we will be discussing the importance of your nonqualified plan benefits, and the decisions you will need to make to participate in the plan. BMO Financial Group employees rate the overall. We've partnered with Candid to survey organizations about their feedback practices. The FA WSL replaced the FA Women's Premier League National Division as the highest level of women's football in England.

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Harris Texas Deferred Compensation Investment Account Plan