Deferred Compensation Plans

Make a plan for your future with our new deferred compensation plan.

 

You work hard for your money, so it’s time to start making your money work for you. By electing to participate in a deferred compensation plan, you’re creating a more secure future for yourself and your family.

 

Why Deferred Compensation?

A deferred compensation plan is non-qualified. This means you have higher limits, more freedom, and more options, unlike a traditional 401(k). It’s a selective plan designed specifically for higher earners and executives within a company.

 

What Benefits Does Deferred Compensation Offer?

With a deferred compensation plan, your earnings grow tax-deferred until you withdraw them. You also have the potential to lower your taxable income by deferring part of your pay before taxes get taken out of it.

Deferred compensation allows you to set yourself up for success after retirement. You’re able to begin contributing well before your retirement years and can easily access your contribution without the repercussions and legalities faced when withdrawing from your 401(k).

So, if you need your contributions for something other than retirement (son or daughter going off to college?), you have the freedom to withdraw funds for whatever expenses you have.

Additionally, you manage how you want your assets invested based on an array of funds available inside the plan.

 

How Does it Work?

Let’s say you make $300K/year. When you receive your full paycheck, you end up with about $183K after taxes. You use $122K to live comfortably, so you put $61K into retirement and savings every year.

Now, let’s look at this if you enrolled in a deferred compensation plan. You still make $300K a year, but you put $100K in your pre-tax deferred comp savings. This leaves you with $200K taxable income. $78K is taken out in taxes, giving you $122K to live comfortably.

In both scenarios, you start and end with the same amount of money, but with deferred compensation, your savings is able to grow exponentially higher.