AMDG Posted December 6, 2019 Posted December 6, 2019 Hi. I am looking at a 457(f) plan that permits after-tax contributions. Please help me - why would a person want to give their already-taxed compensation back to the employer? Deferral of taxation on earnings for a few years does not seem to warrant the risk of the sponsor's bankruptcy. What am I missing? Thanks! This board'S moderators and contributors are the best! P.S. All I could find on Google and elsewhere was a GuideStone plan adminstrator's guide that had a reference to 457(f) plans that permit after-tax contributions.
CuseFan Posted December 9, 2019 Posted December 9, 2019 You are missing nothing - this makes absolutely zero sense. Kenneth M. Prell, CEBS, ERPA Vice President, BPAS Actuarial & Pension Services kprell@bpas.com
Bob the Swimmer Posted December 9, 2019 Posted December 9, 2019 I agree even though over a long period of time, the earnings tax-deferred end up being a big percentage of the total account balance-- Still, this is only for those with too much salary income in their opinion. Since there is no RMD rule I'm aware of for 457(f) plans, you could technically stretch out a large payment over time--but the sponsor bankruptcy risk is more than most would want to bear.
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