Understanding Non Qualified Retirement Plans
Maryland Annuity Resource offers non qualified retirement and compensation plans in Maryland, Washington D.C. and Virginia. We feel that Non Qualified plans are a staple to any investment portfolio along with other income streams. Non Qualified plans are deemed non qualified because they do not conform to IRS regulations as a Qualified Plan for retirement.
Non Qualified Retirement plans have some distinct advantages over qualified plans and we are going to share some of those with you. First of all Non Qualified plans are started with after tax money which means money in which you have saved after paying taxes on earnings. There are also deferred compensation of key employees where a top employee could be paid through a non qualified plan to avoid a larger tax burden.
Non Qualified plans are not governed by ERISA and therefore do not have to conform to contribution limits. Some examples of when a non qualified plan would best be used are:
There are many vehicles we can use for non qualified plans but we like Annuities.An annuity is a tax-sheltered investment offered by insurance companies that can be qualified or non-qualified. You have the ability to contribute large amounts of savings into a non-qualified annuity that will grow tax-deferred until you reach annuitization or rollover the plan to another non qualified annuity.
Since the contributions were not tax-deductible, you will pay taxes only on the interest in the account. There are different types of annuities to satisfy both conservative and aggressive investors. Conservative investors can use fixed annuities that guarantee a specific rate of return over a period of time. Non Qualified Fixed Annuity laddering is one strategy that can allow you to maintain liquidity while utilizing the most up to date products and interest rates.
The maximum contribution for your 401(k) is 17k while the maximum contribution to an IRA is 6k, how in the world are you going to retire with only saving that much money which is dictated by the government. A very wise investor once told me that the government does not want anyone to retire or draw social security. Currently the retirement age is 70 and who knows if that will be raised in the future.
We believe that non qualified annuities are the answer to the retirement problem. There are super savers and people that do not save any money at all. If you are either one or the other, there is a plan for you and we are here to help.
For more information about Non Qualified Retirement Plans, click here.