Get the free 457 Deferred Compensation Plan Enrollment/Change Form

3803 457 DEFERRED COMPENSATION PLAN ENROLLMENT/CHANGE FORM NORTH DAKOTA PUBLIC EMPLOYEES RETIREMENT SYSTEM SON 3803 (Rev. 01-2014) PAPERS PO Box 1657 Bismarck, North Dakota 58502-1657 (701) 328 3900

How to fill out 457 deferred compensation plan

How to fill out a 457 deferred compensation plan:

1. Research and understand the basics of a 457 deferred compensation plan. Educate yourself on the key terms and features of the plan, such as contribution limits, withdrawal rules, and tax advantages.
2. Determine your eligibility for a 457 deferred compensation plan. These plans are typically offered to employees of state and local governments, as well as certain non-profit organizations. Check with your employer or human resources department to confirm your eligibility.
3. Review your financial goals and assess whether a 457 deferred compensation plan aligns with your retirement savings strategy. Consider factors such as your age, retirement timeline, other retirement accounts you may have, and any anticipated financial needs in the future.
4. Set a contribution amount that fits within your budget and takes full advantage of any employer matching contributions that may be offered. The contribution limit for a 457 deferred compensation plan is typically higher than that of other retirement accounts, so consider maximizing your contributions if possible.
5. Complete the necessary paperwork to enroll in the 457 deferred compensation plan. This may involve providing personal information, selecting investment options, and designating beneficiaries.
6. Select investment options that align with your risk tolerance and long-term financial goals. Many 457 deferred compensation plans offer a range of investment options, such as mutual funds or target-date funds, so choose wisely based on your investment knowledge and comfort level.
7. Regularly review and adjust your investment choices as needed. Monitor the performance of your investments and make changes if your financial goals or risk tolerance change over time.
8. Familiarize yourself with the withdrawal rules and options for a 457 deferred compensation plan. This may include understanding the penalties for early withdrawals, minimum distribution requirements, and the various withdrawal options available to you.
9. Keep track of your contributions and monitor your account regularly. Review your account statements, confirm that contributions are being made correctly, and ensure that your account information is up to date.
10. Consult with a financial advisor or retirement planning professional if you have any questions or need assistance with your 457 deferred compensation plan.

Who needs a 457 deferred compensation plan?

1. Employees of state and local governments: Many state and local government employees, including teachers, police officers, and firefighters, are eligible for 457 deferred compensation plans. These plans provide an additional savings option for these employees to supplement their pensions or other retirement benefits.
2. Non-profit organization employees: Certain non-profit organizations may offer 457 deferred compensation plans to their employees as part of their benefits package. These plans can provide a valuable retirement savings tool for employees of non-profit organizations.
3. Individuals looking for tax advantages: A 457 deferred compensation plan offers tax advantages similar to other retirement accounts, such as a 401(k) or IRA. Contributions to a 457 plan are typically made on a pre-tax basis, meaning they are deducted from your income before taxes are calculated. This can lower your taxable income and potentially reduce your current tax liability.
4. Those seeking to save for retirement beyond other retirement accounts: A 457 deferred compensation plan has higher contribution limits compared to other retirement accounts, such as a 401(k) or IRA. This allows individuals to save more for retirement, especially if they have already maxed out their contributions to other retirement accounts.
5. Individuals interested in flexible withdrawal options: 457 deferred compensation plans offer flexibility in terms of withdrawal options. For example, unlike a 401(k), a 457 plan does not impose a penalty for early withdrawals before age 59 ½, as long as certain criteria are met. This can be advantageous for individuals who may need access to their retirement savings before reaching typical retirement age.

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