Non Qualified Retirement Planning: The Basics
Most people have heard of retirement planning before, but the topic of non qualified retirement planning is one that not many people are aware of.
What it is
Non qualified retirement planning is a term which refers to a plan that does not meet the IRS requirements for favorable tax treatment. These plans are funded by employers and are more flexible than qualified retirement plans. There are a few downfalls to non qualified retirement planning over other however, namely that these plans do not have the same tax benefits.
Anyone who does have one of these plans should make sure of a couple things, one being to watch for law changes. This is important because it is necessary to keep a retirement plan up to date with the law and so speaking to a benefits professional about this will be the best idea.
Performing a periodic review of a retirement plan is also very important here, and especially so because errors in a plan are much easier and cheaper to fix when they are small and when they have not been allowed to continue over a long period of time.
Monitoring the people who are working with the plan is also a good idea, because it is important to make sure that the correct data is getting to those people who are operating the plan. Monitoring the plan investments and making sure that any fees are appropriate is all going to help out here, and make non qualified retirement planning as profitable and rewarding as possible.
Tips
One of the best non qualified retirement planning tips is to open up an Individual Retirement Account, or IRA. This account is one which allows a person to save money for retirement, tax-deferred. There are actually two different types of IRAs to choose from: traditional IRA and Roth IRA.
There are similarities and differences between the two, and advantages and disadvantages to both as well. One of the best things about both of these IRAs however is that they allow one to save for retirement without making them have to worry about taxes. Also, as an IRA grows in value the person will never have to pay any taxes on capital gains, even if stocks are sold for a profit.
There are many other great ways to invest and profit as well, and anyone who is interested in learning more about this should go into their bank and speak to a financial advisor more about this.
