Holicent
VIP Contributor
The 457 retirement plan account is a great way to save for retirement. But you need to be aware of the tax consequences and make sure you get all the information you need before making any decisions about your 457 plan.
You can use a 457 retirement plan account to do away with your individual tax bill.
There are two main ways that you can use your 457 retirement plan account:
1) You can pay yourself out of it, so that it's just like an ordinary savings account and you don't have to worry about taxes; or related.
2) You can put money into a self-managed super fund (SMSF), which is what most employers offer as an alternative to a traditional pension scheme; then there's no tax on the earnings until they're withdrawn as cash.
With a 457 plan account, you can minimize the impact that taxes have on your investment returns. And if you're already contributing to your 457 retirement plan account, then it's likely that your contributions are tax deductible.
You can use a 457 retirement plan account to do away with your individual tax bill.
There are two main ways that you can use your 457 retirement plan account:
1) You can pay yourself out of it, so that it's just like an ordinary savings account and you don't have to worry about taxes; or related.
2) You can put money into a self-managed super fund (SMSF), which is what most employers offer as an alternative to a traditional pension scheme; then there's no tax on the earnings until they're withdrawn as cash.
With a 457 plan account, you can minimize the impact that taxes have on your investment returns. And if you're already contributing to your 457 retirement plan account, then it's likely that your contributions are tax deductible.