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What is deferred compensation 457?

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Deferred Compensation 457 (named for Section 457 of the Internal Revenue Code) is a civil service retirement investment program that defers your federal income taxes until funds from your investment are withdrawn, perhaps when you are in a lower tax bracket.

What Is Deferred Compensation 457? | Onefctv
What Is Deferred Compensation 457? | Onefctv

Purpose
Under IRS Section 457 regulations, you can defer your income tax up to 100 percent of your total annual compensation or dollar limit (whichever is less). The program allows you to change the amount of your contribution without penalty.

Advantages
The program reduces your current taxes while increasing your investments. In addition, individuals over the age of 50 and within three years of retirement are allowed to make additional contributions (exceeding the maximum).

Investment tools
The 457 late payment compensation program offers a significant advantage over regular investment as it significantly reduces your investment tax. With ordinary investments, taxes are deducted before making investments. Late-payment investments are not taxable.

Withdrawals
You can withdraw money from your investment when you retire, quit your job, or have a financial emergency.

Schedule a payment
You can arrange to schedule payments for a specific number of years, your estimated lifespan, or until your account is empty. Reinvest in another plan, one-time payment or lifetime annuity purchase can also be arranged.

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