Deferred Compensation plans can be a power tax savings tool for high income corporate employees. However, navigating your choices within the plan present a challenge. If you are already participating in the EDCP plan, you may feel as though your deferral and payout elections thus far have been random. For those who wish to optimize their elections for their situation, there are a few important things to consider.
The EDCP plan allows you to contribute pre-tax money above and beyond the regular IRS limits for 401(k) contributions.
Difference Between the Target EDCP and 401(k) Plan
While a 401(k) is considered "Qualified," the EDCP plan is considered "Non-qualified." The difference essentially is