“Deferred compensation” refers to any compensation that is earned in one year but not paid out until a later year. This could happen for a variety of reasons, such as when an employee agrees to forgo a portion of their current salary in exchange for receiving a larger bonus or salary in the future. There … Read more
Profit-Sharing Plan: What It Is, How It Works, With Examples A profit-sharing plan is a type of employee benefits program that allows employees to share in the company’s profits. The plan is typically set up as a percentage of each employee’s salary, and can be used to incentivize employees to help the company achieve its … Read more
An Employee Savings Plan, or ESP, is a retirement savings account that is offered by an employer. Employees can contribute to their ESP on a pretax basis, and the employer may also make contributions. The money in an ESP can be used to purchase a variety of investment products, including stocks, bonds, and mutual funds. … Read more
Long-Term Incentive Plans (LTIPs) are retirement savings accounts that offer a tax-deferred way to save for retirement. The money in your LTIP can be used to purchase a variety of investments, including stocks, bonds, and mutual funds. Your contributions to an LTIP are not tax-deductible, but the earnings on your investments grow tax-deferred. When you … Read more
The savings rate definition is the percentage of an individual’s income that is saved. The savings rate is a key factor in determining an individual’s ability to save for retirement. The higher the savings rate, the more likely an individual is to be able to save enough for retirement. What are the four types of … Read more
A Thrift Savings Plan, or TSP, is a retirement savings account that is available to eligible federal employees and members of the uniformed services. The TSP is similar to a 401(k) plan offered by many private employers. Contributions to a TSP account are made through payroll deductions. Employees can choose to contribute a portion of … Read more
A rollover is a type of retirement savings account in which the funds are not taxed until they are withdrawn. This allows the account holder to defer taxes on the account until they reach retirement age. Rollovers can be used to transfer funds from one retirement account to another, or to convert a traditional IRA … Read more
The Registered Retirement Savings Plan (RRSP) is a type of Canadian retirement savings account that you can contribute to using pre-tax income. The RRSP deduction limit is the maximum amount of money that you can contribute to your RRSP in a given year. The deduction limit is based on your earned income for the year … Read more
Reading into nonqualified plans is the act of looking at a retirement savings plan and trying to determine if it is qualified or not. This can be difficult to do, because there are many different types of retirement savings plans, and not all of them are clearly labeled as qualified or not. However, there are … Read more
A custodial agreement is a contract between an individual and a financial institution, in which the financial institution agrees to hold and manage funds on behalf of the individual. The agreement may be revocable or irrevocable, and may be used for a variety of purposes, including retirement savings, estate planning, and charitable giving. What are … Read more
