If you are a member of a pension system and expect to collect social security during retirement, you may be wondering whether joining DCP will benefit you. While pension and social security provide two-thirds of a sound foundation for retirement, these two income sources alone may not be enough to live comfortably and cover expenses adequately.
Experts say an individual will need as many sources of income as possible for retirement. NYC DCP is an excellent choice as a third stream of income to supplement pension and social security throughout retirement
Depending on the age in which you retire, you may not be eligible to collect Social Security yet. During this time between retirement and when Social Security payments begin, it is possible you may not have enough to cover your expenses. Additionally, your Social Security benefit increases the longer you delay payment. This is where the NYC Deferred Compensation Plan comes in.
The money saved in the NYC Deferred Compensation Plan can be used as a bridge to cover necessary expenses in that period of time before you decide to collect Social Security. Even if you do retire at a normal retirement age and are eligible to collect social security, Pre-tax contributions are tax deferred – lowering your taxable income today.
If you join the Plan on a Roth (after-tax) basis, taxes are paid at the time your contributions are made and the earnings on those contributions are income tax-free.
NYC DCP is an excellent way to supplement your retirement income, whether you're:
To learn more about the Plan, visit our Customer Service Center or register to attend a free financial planning seminar.