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URL:  https://boards.fool.com/eddie-gtgta-defined-benefit-plan-is-one-10262492.aspx

Subject:  Re: A plan to consider!! Date:  8/2/1998  10:35 AM
Author:  TMFPixy Number:  4798 of 95767

Eddie,

>>a defined benefit plan is one qualified under IRS rules for certain tax benefits, and a 457 plan is not. <<

OK Pixy,
please explain what you mean by "tax benefits." All I know is that this plan DOES lower my taxable income.
And yes, I do plan to voluntarily move all the money in all the accounts in my 457 to one vendor, and annuitize it over my life time.


The tax benefits are when the employer gets to take a deduction for contributions and when you get to exclude contributions and earnings from taxes. In a 457 plan, you get the exclusion for your contributions when made. The employer does NOT get a tax deduction for any contributions the firm makes until you get the money. You MUST take the money when you leave the firm, and you CANNOT roll it to an IRA to continue any tax deferral. At that time, you get taxed and the employer gets a deduction.

See my Foolish Retirement Plan Primer at http://www.fool.com/retirement for further details.

Regards…..Pixy


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