For Executives and Physicians employed by Hospitals or other nonprofit entities, the ability to accumulate sufficient assets for retirement is especially challenging. The qualified 403(b) plan has limits on contributions similar to those found in 401(k) plans. Deferred Compensation plans, a common vehicle in Fortune 1000 companies that allow Executives to contribute significant additional dollars on a pretax basis, are not available in the nonprofit environment. The related programs, 457(f) plans, have significant limitations that have made these plans unattractive to most participants. 457(b) plans do allow for some additional pretax savings, but again have limited contributions, and subject the account balances to creditors in the event of an organization’s financial failure.
The Nonprofit Executive Retirement Modeler is a simple-to-use tool that allows Executives and Physicians to model their targeted retirement savings, direct those savings to existing organization sponsored programs (e.g. 403(b) and 457(b) plans) and after-tax savings. Executives can gain a better understanding of how existing programs can help them accumulate for retirement. The ability to move dollars between plans heightens their understanding of each program.
The Modeler also demonstrates how the Executive Security Plan, an after-tax savings vehicle, could be used to enhance retirement savings. The user of the Modeler can redirect current savings from an existing plan or after-tax savings into the Executive Security Plan. The Modeler provides a comparison of the financial results when targeted savings are redirected.
We have put together three short videos that demonstrate the use of the Nonprofit Executive Retirement Modeler. Click on the following links to see the video:
VIDEO 1: MODELING CURRENT PROGRAMS (5:27)
How to use the Modeler to project retirement income using an existing 403(b) and 457(b) programs. Target contributions in excess of IRS Limits are modeled using after tax savings.
VIDEO 2: MODELING THE EXECUTIVE SECURITY PLAN (4:57)
How to use the Modeler to redirect existing target contributions from the 457(b) plan and after tax savings, into the Executive Security Plan.
VIDEO 3: HOW THE EXECUTIVE SECURITY PLAN WORKS (6:42)
An explanation of how the Executive Security Plan works, using the detailed exhibit.