The Mississippi Deferred Compensation Investment Account Plan offers employees the opportunity to save for retirement by deferring a portion of their income on a pre-tax basis. It is a valuable benefit provided by the state of Mississippi for its employees, including public school teachers, state agency workers, and other governmental employees. The Mississippi Deferred Compensation Investment Account Plan allows individuals to save for retirement through various investment options. Participants can choose from a range of investment funds, including stocks, bonds, and mutual funds, tailored to their personal risk tolerance and long-term financial goals. This retirement savings plan is specifically designed to provide employees with tax advantages. Participants can contribute a portion of their salary before taxes, thus reducing their taxable income and potentially lowering their overall tax burden. The contributions and any investment earnings are tax-deferred until withdrawal during retirement, enabling individuals to potentially grow their retirement savings faster. With the Mississippi Deferred Compensation Investment Account Plan, participants can also benefit from employer matching contributions. The state may match a portion of the employee's contributions, effectively providing a boost to their retirement savings. This employer match is a valuable incentive to encourage employees to save for their retirement. Moreover, Mississippi offers two different types of Deferred Compensation Investment Account Plans: the 457(b) plan and the 401(k) plan. While both plans provide similar advantages, there are some differences in terms of eligibility and contribution limits. The Mississippi 457(b) plan is available to all state, county, and municipal employees, including public school teachers. It allows participants to contribute a higher amount of their income compared to the 401(k) plan. In 2021, the maximum contribution limit for the 457(b) plan is $19,500, with an additional catch-up contribution of $6,500 for participants aged 50 or older. On the other hand, the Mississippi 401(k) plan is available solely to employees of the Mississippi State Board of Education and the Institutions of Higher Learning. The contribution limits are lower compared to the 457(b) plan, but it still offers a valuable option for retirement savings. In 2021, the maximum contribution limit for the 401(k) plan is also $19,500, with an additional catch-up contribution of $6,500 for participants aged 50 or older. It is important for Mississippi employees to carefully consider their retirement goals, risk tolerance, and eligibility when choosing between these two plans. Seeking guidance from financial advisors or utilizing the resources provided by the Mississippi Deferred Compensation Investment Account Plan can help individuals make informed decisions about their retirement savings. In conclusion, the Mississippi Deferred Compensation Investment Account Plan is an excellent retirement savings option for state employees. By deferring a portion of their income before taxes, participants can save for the future while potentially benefiting from employer matching contributions. The plan offers various investment options, allowing individuals to tailor their portfolio based on their personal financial objectives and risk tolerance. Whether through the 457(b) or the 401(k) plan, Mississippi employees have the opportunity to secure their financial future and enjoy a comfortable retirement.
Mississippi Deferred Compensation Investment Account Plan
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The 457 plan is a retirement savings plan and you generally cannot withdraw money while you are still employed. When you leave employment, you may withdraw funds; leave them in place; transfer them to a 457, 403(b) or 401(k) of a new employer; or roll them into an Individual Retirement Account (IRA).
457(b) Assets can be withdrawn without penalty at any age upon separation from service from the plan sponsor, or age 70½ if still working.
You can request a loan by logging in to your DCP account, completing a Loan Application Form, or calling the Service Center at 844-523-2457.
You can take penalty-free withdrawals from your 457 account at any age after you leave your job. Most other types of retirement-savings plans assess a 10% penalty if you withdraw money before age 55 or 59½, depending on when you leave your job.
Investing your deferred compensation Your plan might offer you several options for the benchmark?often, major stock and bond indexes, the 10-year US Treasury note, the company's stock price, or the mutual fund choices in the company 401(k) plan.
You can take out small or large sums anytime, or you can set up automatic, periodic payments. If your plan allows it, you may be able to have direct deposit which allows for fast transfer of funds. Unlike a check, direct deposit typically doesn't include a hold on the funds from your account.
A deferred compensation plan withholds a portion of an employee's pay until a specified date, usually retirement. The lump sum owed to an employee in this type of plan is paid out on that date. Examples of deferred compensation plans include pensions, 401(k) retirement plans, and employee stock options.
Investment options available in 457(b) plans are generally limited to annuities and mutual funds. You can't buy exchange-traded funds (ETFs) or individual stocks in a 457(b) account, for instance.