Cash Or Deferred Arrangement - CODA
 |
Definition of 'Cash Or Deferred Arrangement - CODA'The method of funding any type of qualified profit-sharing or stock bonus plan. Cash or deferred arrangements allow employees to contribute a portion of their salaries to the plan so that their savings can grow tax-deferred. The most common type of CODA is a cash bonus which is paid into their 401(k) plan, but it could also be a salary reduction. |
 |
Investopedia explains 'Cash Or Deferred Arrangement - CODA'Employees who participate in cash or deferred arrangements may still contribute to traditional or Roth IRAs as well. However, they may not receive the full deduction from a traditional IRA contribution if their incomes are above a certain level. CODA plans allow the individual to fund their retirement and avoid immediate taxation on the diverted contributions. |
Related Definitions
Articles Of Interest
-
Introduction To SIMPLE 401(k) Plans
Learn about the features and benefits of the plan that is a cross between a SIMPLE IRA and a traditional 401(k) plan. -
3 Reasons To Use An Employer-Sponsored Retirement Plan
If you aren't participating in your employer-sponsored retirement plan, you're missing out! Learn the benefits. -
If a company undergoes an acquisition can an employee withdraw 401(k) funds tax free?
Although the participant may be eligible to withdraw the funds if a plan is terminated as a result of an acquisition or other similar transaction, this does not mean that the 10% penalty will ... -
Do I need to hit my 401(k) contribution limit before I can begin making catch-up contributions?
You generally need to reach the limit established by the plan in order to make catch-up contributions; therefore, if the plan limit is $15,500, you will be able to make catch-up contributions ... -
Business Owners: A Guide To Qualified Retirement Plan Loans
Thinking of adding a loan feature to your company's plan? Here's what you need to know. -
The 401(k) and Qualified Plans Tutorial
Learn about eligibility requirements, contribution to and distribution rules for these retirement plans. -
Are You Really Retired Just Because You Stopped Working?
Retirement doesn't have to mean the end of working, it can be just the end of working to get by every week. Retirement should be about working only if you want to, not because you have to. -
Introduction To Coincident And Lagging Economic Indicators
Investors can learn a lot, or very little, from these indicators once they know how to use them. -
How To Cut Your Mutual Fund Fees By Up To 90%
Most mutual funds don’t come close to beating the indexes they’re compared against. And yet they carry steep fees for active management. Find out how a little research and effort can cut your ... -
5 Ways To Protect And Grow Your Retirement: Whether You’re 45 Or 75 Or Somewhere In Between
Investors who take steps now can shield themselves from the coming challenges thrust upon retirees.
Free Annual Reports