Non-Qualified

Retirement Plans
These are plans that do not meet the IRC or ERISA requirements. These
plans are funded by employers and are more flexible but they do not have
the tax benefits qualified plans do. Benefits are paid at the retirement age
in the form of annuities, which are taxed as ordinary income tax, or in lump
sum payments, which can be transferred into an IRA to defer taxes. An
example is the 457 plan.

457 plans are aimed at state and local government employees of tax-
exempt organizations. In 2013, participants can defer up to $17,500 of
their annual income, and contributions and earnings are tax-deferred until
withdrawal. Distributions start at retirement age but participants can also
take distributions if they change jobs or if they have an emergency,
including death. Participants can choose to take distributions as a lump
sum, annual installments or as an annuity. Distributions are subject to
ordinary income taxes and the amounts cannot be transferred into an IRA.