By Kathryn Kretschmer-Weyland
July 30, 2007

According to a 2006 survey by Nationwide’s Retirement Education Institute, 40 percent of public employees say that saving for retirement is their most important goal. If you want to take full advantage of your 457 plan, you need to understand all of the benefits that come with it.

Benefits you are aware of

Tax deferred investing: The contributions that you make to your 457 plan are on a pre-tax basis. This means that investing in your 457 plan lowers your taxable income and reduces your current tax burden. The money that would have been spent on taxes is allowed to compound tax-free, which helps your retirement savings grow over time.

Access to a retirement specialist: The retirement planning landscape is constantly changing and it can be difficult to keep up. Contributing to a Nationwide deferred compensation plan gives you access to a retirement specialist who can help guide you along the way. Information from retirement specialists is for educational use only and should not be deemed as tax, legal or investment advice.

Automatic deposit into your account: Contributions to your 457 plan are automatically deducted from your salary and deposited into your retirement account. This makes it easier to save for retirement and gives you an opportunity to pay yourself first.

Assets are protected from your employer’s creditors: Governmental 457 plans are structured in a way that protects your retirement savings account from your employer’s creditors. This means that if your employer had to declare bankruptcy you would not be at risk of losing your retirement assets.

Early withdrawal option: When you separate from service, or have an unforeseeable emergency, you are eligible to start withdrawing money from your 457 plan. This gives you the freedom to withdraw money from your account before age 59 ˝ without having to pay the early-withdrawal penalty associated with other types of retirement accounts like an IRA (individual retirement account). Please note that withdrawals from a 457 plan are taxed as ordinary income.

Nationwide’s FundGuard and ProAccount are two optional programs that can help you make the most of your retirement planning. FundGuard provides you with a guarantee that your principal investment will be protected no matter how the market performs. With ProAccount, your investments are managed by a professional adviser who will actively review and adjust your portfolio according to your needs.

Both of these features are offered for an additional fee. FundGuard’s principal protection guarantee is subject to the claims-paying ability of Nationwide Life Insurance Company.

For additional information on the USCM Deferred Compensation Plan offered by Nationwide Retirement Solutions, contact Kathryn Kretschmer-Weyland at 301-460-5251 or send e-mail to kweyland@usmayors.org.