Nationwide Deferred Comp

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Nationwide Deferred Comp

 

About Deferred Compensation 

You've probably heard of the different types of retirement plans: 401(k), 403(b), 401(a) and 457(b) Deferred Compensation with both traditional and Roth contributions.  As a public employee, the 457(b) plans are created specifically for you.

Nationwide® has worked with public sector employees for more than 30 years, so we know the kinds of questions you may have about your plan. We'll give you the tools and information to help you feel confident about investing for retirement. Keep in mind that investing involves market risk, including possible loss of principal, and there's no guarantee that investment objectives will be achieved.

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457(b) Deferred Comp Page

Here are some frequently asked questions about deferred comp plans:

  • What sets a 457b apart from other retirement plans? A 457(b) may offer benefits other retirement plans can't, like penalty-free withdrawals once you stop working for your public sector employer.
  • What does tax-deferred mean? Basically, you don't pay income taxes on your deferred comp plan contributions or earnings until you retire and/or begin to take payments from your account. This may lower your taxable income now and in retirement. Withdrawals taken in retirement are taxed as regular income.
  • How much can I put into a 457 plan? Check out the current contribution limits.
  • Can I combine retirement accounts? Our Retirement Specialists will work with you to combine, or consolidate your eligible retirement accounts into your deferred comp account. This may make managing your retirement investments a little easier.

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457(b) Roth Contributions Page

Roth 457 Accounts: A Potential Tax-free Retirement Income

You’ve probably heard of a Roth IRA – an investment vehicle that lets you make contributions that are not tax deductible but take tax-free distributions in retirement, after certain conditions are met. Did you know there’s also a Roth option for 457(b) deferred compensation plans?

When you choose make Roth 457 contributions, you’ll pay taxes upfront when your money goes into the plan. Then you’ll enjoy tax-free withdrawals – as long as you’re at least 59½, and do not take withdrawals from your Roth account for at least five years after your first Roth contribution is made to the plan.

You can choose to allocate part or all of your salary deferral to the Roth or all or part of your salary deferral to your traditional 457 pre-tax account.

Is a Roth 457 account right for you?

Only you can answer that question. But you may want to consider making Roth 457 contributions if you:

  • Think that taxes will be raised before you retire and want to take advantage of potential tax-free withdrawals
  • Expect to be in a higher tax bracket when you retire
  • Are younger, with many years until your retirement

The Roth 457 account option has only recently been allowed by law, so it may not be available in your deferred compensation plan. Contact us if you have questions.

Roth 457 Flyer (pdf)

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