Consider Staying In KDC
Participation in Kentucky Public Employees’ Deferred Compensation Authority (KDC) puts you in control of when, where and how much you invest. But, that is just the beginning. When you retire, you are also in control of when you access your money and how long you choose to leave it in your plan to possibly grow for you, until you reach 70½ and are required to take minimum distribution. There are plenty of benefits to staying active in KDC through retirement.
When you are considering investing in retirement through KDC, you will want to keep in mind that you will face market risk. It is always there and, because of it, you could lose what you invest. We can help you understand market risk and the ways to possibly reduce its impact to your plan account.
Potential benefits of keeping your KDC account
Unless you need your money now, staying in KDC should be a no-brainer. You will continue to receive personal attention from non-commissioned local Plan Service Representative. More reasons to stay active in KDC include:
- Watching your money potentially continue to grow, tax-deferred
- Delaying a 20% withholding of the taxable portion of your money for federal income taxes, until you may be in a lower tax bracket. Withdrawals are then taxed as ordinary income.
- Delaying state and local taxes, until you may be in a lower tax bracket
- Retaining access to your money – if you roll your money into another plan, you are subject to the rules of the new plan, and access to your money may be limited
Potential benefits of combining assets
After retirement, you may make managing your money easier by combining your other assets with your plan. Combining your assets with KDC can benefit you because:
- Paperwork is simplified
- You may pay less in annual account fees
- You receive personal help from local Plan Service Representatives throughout retirement
As you consider combining assets into your KDC account, bear in mind that qualified retirement plans, deferred compensation plans and individual retirement accounts are all different, including fees and when you can access funds. Assets rolled over from your account(s) may be subject to surrender charges, other fees and/or a 10% tax penalty if withdrawn before age 59½. KDC does not offer legal or tax advice. Please contact your legal or tax advisor for such advice.
Get the help you need
Talk with one of our local Plan Service Representatives for more information.