Deferred compensation plans are an excellent way to save for retirement. Your client, Melissa, is 30 years old and her AGI is $75,000. Melissa does not participate in an employer- sponsored retirement plan and has approached you for advice.

Would you recommend Melissa invest in a traditional IRA or a Roth IRA and why? What are the benefits of investing in an employer- sponsored plan? Melissa would like to return to school to earn a master's degree and she would like to purchase a house within the next 5 years. How will these plans be affected by investing in a deferred compensation plan?