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.