Hi,
Accumulation characteristics of NQDC are like traditional 401k (tax-deferred, very large annual limits, but subject to credit risk of the company as investments are notional), but the withdrawal characteristics are very different (can not be rolled over, can only be withdrawn per the schedule selected at the time of deferral, 1/N over N years, starting some year x; any change pushes x at least by 5 years, and only before distribution starts.) And calendar year's contribution is treated as a separate account.
With other applications, I have tried to model it like a "mini-pension" from year x to (X+N-1), for each of the series. But that ignore any kind of growth.
Does Pralana help model NQDC accounts in a better way?
Came here to ask just this question. What does the creator of Pralana advise? What have others done?
I just model it (a non-governmental 457b in our case) as part of the regular tax-deferred IRA account, but with specific Scheduled Withdrawals (based on whatever schedule your plan allows/imposes). It does mean that, in the case of withdrawal over N years, I have to manually calculate the specific withdrawal amount for each year, but that's not too complicated.
