Transcription of 457 401k SPD
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457 401k SPD
G:\DCP\New_Guides\ to the award winning City of New York Deferred Compensation Plan!This booklet describes the City of New York Deferred Compensation Plan, an umbrella program consisting of the 457 Plan and the 401(k) Compensation is a retirement savings plan which lets you save for the future through easy payroll deductions. The pre-tax 457 and 401(k) allow you to put aside a portion of your pay before federal, state, and local income taxes are taken out. Your taxes will be reduced as a result of the contributions you make, and your contributions and their earnings will accumulate tax-deferred. With the Roth 457 and Roth 401(k), your contributions are made on an after-tax basis, and the earnings on those contributions are income tax-free. Because these programs are tax-favored plans, they are the ideal retirement savings vehicles. And, because Deferred Compensation is able to aggregate the billions of dollars in the City s pension funds to negotiate lower investment manage-ment fees, it offers City employees one of the lowest cost plans anywhere.
However, the combined deferral cannot exceed $20,500. In the 401(k) Plan, you may choose to make pre-tax contributions and/ or Roth (after-tax) contributions. However, the combined deferral cannot exceed $20,500. You may choose to put money in the 457 Plan or the 401(k) Plan, or both, for a combined deferral of $41,000, or $54,000 if age 50 or ...
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