Cash Or Deferred Arrangement - CODA
Without acronyms, we wouldn’t have terms like BASE jumping, CARE package, or SCUBA.
But finance acronyms are even better. For example: CODA. It stands for a “Cash or Deferred Arrangement." It’s a fancy way to describe something else for legal purposes. But we’ll give you a simple example of one: Your 401(k).
A CODA is a program that allows employees to defer part of their earnings for the purposes of growing that portion of their income tax-free until retirement.
There are pretty strict regulations around this area of employee benefits, and you’ll need to make a few difficult decisions along the way:
• You have to decide on the specific percentage of your income to allocate.
• You have to decide if the CODA plan is a cash plan, a stock bonus plan, a profit sharing plan, or one of many other options.
• You have to decide to get up every day, stare into your own blackened eyes in the mirror, feel your heart thumping through that button-down shirt, and confess to yourself that there are only 6,865 days left with that god-forsaken company until you can finally retire for maybe two decades, and then ultimately shove off this mortal coil and discover once-and-for all what lies well beyond this maddening and ever-expanding cage of beasts and man.
• You have to decide what color pen to sign the CODA agreement with at the HR meeting.
Related or Semi-related Video
Finance: What are Government Bonds?52 Views
finance a la shmoop. what are government bonds?
now we're gonna narrow this question a bit and declare these bonds to be US [hands shape the question]
government bonds. our answer would be a tad different if we were discussing
bonds backed by North Korea Nigeria or Egypt so US government bonds come in a
few flavours. generally speaking they range in duration that is how long it
takes for them to mature and the principal get paid off. short-term US
government paper it's a fancy term for a bond ,refers to things that come due in a
year or less. that's short-term. year or less. and then there are Treasury bills
which come in a variety of durations and our price like this note how different
these look versus just you know buying a bond .but when you buy a bond it has a [chart shows prices]
face amount of say a thousand bucks for what is called its par value. that piece
of paper might agree that clown shoes incorporated which is where most
congressmen get their Footwear of course, will pay 30 bucks twice a year to the
holder for 10 years, and then pay back the original thousand bucks invested
it's like a normal vanilla bond, the interest rate here in this case is 6%
per year, but many US government notes are sold at auction which means they
sell at a discount to their par value. well regardless of how they're sold US [auction with a clown in attendance]
government bonds are backed by what is generally perceived in the world as the
most certain or secure financial backing. even more powerful than Google .if sorry
Larry and Sergey we're just keeping it real. the bonds are backed specifically
by the US government's right to tax its citizens. and oh they tax us. do they ever.
so now you can stop wondering about that bottomless hole a third or more of every
paycheck vanishes into. [portion of paycheck flies down dark hole in the ground]
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