Nonqualified Retirement Plans

A nonqualified retirement plan is an annuity or pension plan that a person buys individually rather than through an employer. Nonqualified plans are not subject to the same restrictions as qualified plans; as a result, withdrawal penalties are smaller or non-existent. Additionally, a person may continue to make contributions until an older age, and  contributions are not tax deductible (but earnings still are).

In the United States, specific restrictions on nonqualified plans are set at the state level. Roth IRA is an example of nonqualified plan.

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