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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Is this a qualified or non-qualified deferred comp plan? There is a BIG difference. A non-qual plan allows you to defer income above and beyond the current 17.5k allowable under qualified plans. They are generally offered to highly comped individuals. The kicker is that while you can do this for long-term savings and then receive distributions at your normal tax rate, the money is considered company assets. It will be recordkept under your name and your investment elections but in the event of a Company's insolvency the money can be used for creditors. Some Company's will put the money into a trust which provides a bit more protection but many Company's keep the money in their general accounts.

If this is a qualified plan (e.g. Non-profits have 457 deferred comp plans) then the rules are similar to a 401k including annual contribution limits.[/quote]

It's a non-qualified plan.  We don't have a lot of extra money lying around with 2 kids in daycare.  Maybe something to consider down the road.  So it s another way to save for retirement?[/quote]

Op, I'm the PP. You can use it for retirement but it's really more for savings. The reason I say that is that if you leave your Company before retirement you either have to do a distribution or put the money in another Company's plan, provided they have one. I don't believe it can go into an IRA because it is non-qual (I could be wrong on this point maybe it's just that it can't go into a 401k). There are also lots of little rules, for example you have to make your annual contribution election before the start of the plan year and you can't change it.

I apologize for coming off too pessimistic. They can be a wonderful option if you have spare income to save (for example if you get large bonuses). I think the biggest thing to research is the stability of the Company.[/quote]

OP here.  This is helpful info.  My company is a stable Fortune 500 so not too many worries there.  I'll keep this in mind for the future.[/quote]

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