What Is A Supplemental Nonqualified Retirement Plan? 
When a person has paid the maximum permitted amount into tax deductible plans they might want to have a supplemental plan . The vehicle for this plan is either life insurance or an annuity for most people . These two products have tax deferral as a part of their design . When these products are used to increase the amount being set aside for retirement , current income tax on earnings is generally not reported . This means that interest on the principal plus the interest earned plus the taxes unpaid make this an attractive way to save money . 