Tax Playbook · Keep more of each paycheck
Deferred comp: skip tax now, pay later (maybe less)
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A deferred comp plan lets you skip pay now and take it later, usually at retirement. A CFO earning $800,000 who defers $200,000 a year can cut current federal tax by about $74,000. The catch: the money stays a promise from your company, not cash in a protected account. If the company goes bankrupt, you could lose some or all of it.
Good for: High earners who already maxed out their 401(k) and trust their employer's future.
Learn the basics
Recent articles & guides
- Deferred Comp Elections Are Irrevocable: Settle This Before December 31 (BAS Financial)
- How Do Executive Non-Qualified Deferred Compensation Plans Work? (Greenbush)
- Understanding Deferred Compensation for Executives (Kubera)
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Educational summary, not tax advice. Limits and rules change — confirm current law with your tax adviser.