Operating since 1973, Nationwide Retirement Solutions is a subsidiary of Nationwide Financial Services. It specialises in retirement solutions, mainly to the public employee sector. This article provides a guide to the company and its offerings.
The Nationwide business model
Its main focus is on 457 deferred compensation plans for public employees. Nationwide manages the record keeping, education, and administration of 1.5 million public employee deferred contribution plans, to the sum of $40 billion as of 01.06.2011. It also provides a wide range of retirement plans for private company employees. Credit rating issues
In 2008, Nationwide’s parent company NFS had its credit rated downgraded. However, as of August 2010, Moody, the international rating agency has declared its credit rating as stable.
Nationwide Retirement Solution plans
Nationwide provides the following retirement plans:
With a 401k retirement plan the employer will usually match the contributions of the employee, which equates to free money upon retirement. While employers will match a certain amount of the payment, it is also possible and recommended for the employee to allocate more money to this plan, in a bigger pension. Particularly, if the same amount of money is deposited into the account on a regular basis it results in "dollar cost averaging", whereby more money is invested when the pricing is at a low dollar level, which once again works out well over time. Withdrawals
It is possible to withdraw money early, but usually with some penalties. 403b Plan
This is for, teachers, churches, hospitals and non-profit organisations. Like the 401 plan, this allows the employee to defer some of their earnings into the pension plan, and while it is possible for employers to also pay into the plan, as a rule of thumb most employers are reticent to do so. 403b plans are atypically invested in the following: - Fixed Annuities
- Variable Annuities
- Mutual Funds Withdrawals Are possible with heavy penalties. 457 Plan
This is a deferred compensation plan, which is designed for state and municipal workers as well as workers of some tax exempt organisations.
Differences between a 401k and a 457k - There is no age limit with withdrawals from a 457 plan
- There is no penalty for withdrawing money early
- It has a withdrawal option for unforeseen emergencies
- Flexibility in withdrawal payments Other Benefits for 457 Plan holders
As of 2007, nationwide also rolled out these two accounts; Nationwide Proaccount. This is a professional money magnet account, which helps with investment advice. Nationwide Fund Guard
This has been introduced in order to protect the account holder’s investments regardless of market fluctuations. No matter what happens to the market their initial investment is protected.