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Author: ferjen Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19414  
Subject: Deferred Compensation Date: 3/16/2000 8:39 PM
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Just read the Fool's analysis of annuities. Guess what? I have annuities by way of my State of Florida Deferred Compensation Plan. Is it obvious I work for the State? Well, I'm 30 now and have been contributing for a few years but am now wondering if I should put my $ to work elsewhere. Unfortunately, the only investment vehicle made available to me by my employer is the D.C. Plan. Of course, if I stay 30 years, I get a full pension of 48% of my final 5 year average salary 'til I'm dead. That pension would kick in at age 53 in my case. Am I able to kick the DC cash into an IRA or something while employed? After employment? All I know now is that the only way I get the cash payout is to quit or retire. Just not sure what direcion to take on this baby. Later...
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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2955 of 19414
Subject: Re: Deferred Compensation Date: 3/17/2000 7:56 AM
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Greetings, Ferjen, and welcome. You wrote:

<<Just read the Fool's analysis of annuities. Guess what? I have annuities by way of my State of Florida Deferred Compensation Plan. Is it obvious I work for the State? Well, I'm 30 now and have been contributing for a few years but am now wondering if I should put my $ to work elsewhere. Unfortunately, the only investment vehicle made available to me by my employer is the D.C. Plan. Of course, if I stay 30 years, I get a full pension of 48% of my final 5 year average salary 'til I'm dead. That pension would kick in at age 53 in my case. Am I able to kick the DC cash into an IRA or something while employed? After employment? All I know now is that the only way I get the cash payout is to quit or retire. Just not sure what direcion to take on this baby. >>

When you say "deferred compensation plan" sponsored by Florida, do you mean a 457 or a 403b plan? Is there an employer match to your contributions? Can you do better elsewhere with your investments with after-tax money instead of the tax-deferred money within the plan? Those are the type of questions you should seek to answer.

Take a look at Step 4 of the 13 Steps to Foolish Retirement Planning at http://www.fool.com/Retirement/Retirement.htm to see the type of analysis you need to do for yourself. Also see my Foolish Retirement Plan Primer available at the same link to gain an overview of the plan available to you. Both will help you reach a decision on this issue.

Regards..Pixy

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Author: ferjen Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3004 of 19414
Subject: Re: Deferred Compensation Date: 3/19/2000 6:56 PM
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TMF Pixy responded:

"When you say "deferred compensation plan" sponsored by Florida, do you mean a 457 or a 403b plan?"

It's a 457(b)...

"Is there an employer match to your contributions?"

We're talking about the State of Florida here...so...no way I'll ever get an employer match.. This program is only meant to provide employees with a means to supplement their pensions (and the pension is pretty darn good if one can make it for 30 years). However, the DC Plan was marketed to us as a "pre-tax" plan which I'm now not so sure is much of a selling point anymore.

"Can you do better elsewhere with your investments with after-tax money instead of the tax-deferred money within the plan?"

It's hard to tell without doing a complex future worth analysis. It seems to me that there are to many variables. Based on my present stock selections, heck yeah! But I've only got 2 years under my belt in stocks. IRA's interest me but I don't like the idea of not being able to get to my money until age 59+. If I make it 30 years with the State, I will retire at 53. Commentary welcome. Later...



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Author: Darrelruth Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3629 of 19414
Subject: Re: Deferred Compensation Date: 4/22/2000 9:47 AM
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Does FL not allow 403(b)s outside the 457 DC? I would think that the DC plan would outline your options. You can contact the IRS.gov for publications on 457 plans to determine your options (assuming they supercede state plans by regulation). You might find some information that would lead you to more inquiries by checking out www.ohio457.org. In Ohio, after 30 years,
one receives over 63% of a 3-year final average salary.
I think the restrictions here are pretty tight too in 457's. Just something to check out. Maxing out the "new Roth IRA's" are especially attractive right now, assuming Congress doesn't decide to tax them later
when "we" are the ones holding wealth.

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