Taxes at the Optimal Time. Your Need for a Nonqualified Deferred Compensation Plan

September 22, 2016

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Taxes … at the Optimal Time

nonqualified deferred compensation planA nonqualified deferred compensation plan, NQDC, can provide you flexibility and control in planning when you receive compensation payouts. Income taxes on the payments received are not paid until the year you receive your money.

  • By choosing to defer distributions while you are working (and your tax rate is potentially higher), you can schedule for distribution during your retirement, when your effective tax rate may be lower.
  • You can coordinate your NQDC distributions with your social security distributions or other pre-tax retirement plans such as your 401(k) plan. You may be interested in funding your retirement with NQDC distributions first, and then receiving qualified plan distributions later.

As an eligible executive with variable income components, you may use your NQDC plan to choose when you take distributions, including the option to take installments. Additionally,
you have the flexibility to delay distributions beyond the originally scheduled timing.

Learn how NQDC can help you build wealth now and for the future.
Contact Fulcrum Partners.

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