People Like You

I had a meeting with my financial planner and it made sense for me to look for ways to shelter more of my total compensation from income taxes. So I enrolled in the Deferred Compensation Plan at 10% of my $300,000 salary: $30,000.

I participate in the Executive Annual Incentive Bonus program, and although I wanted to defer some of my bonus, I wasn’t sure which bonus this year’s election covers. My financial planner explained that the annual enrollment period covers the cash bonus I earn in the coming year — even though it is paid in the following year. If I want to defer the bonus I earn next year, I would need to be enrolled in the plan the following year for that deferral to happen.

I decided to defer 40% of my cash bonus under the Annual Incentive Bonus.

I feel like that gives me enough of a cushion for retirement needs, as well as flexibility if I want to use a portion of my bonus toward my daughter’s college expenses.

The Deferred Compensation Plan isn’t something I participated in until another participant explained how he used the plan. Then I really got it! Why pay all those taxes now?

I am enrolling to defer 15% of my $200,000 base salary: $30,000. I am also deferring 50% of the cash bonus paid under the Company Performance Bonus Plan.

In the next five years, my wife and I plan on renovating our home and getting it ready to put on the market. The plan is a good way to put that money aside, avoid paying taxes until we actually use the money and, hopefully, give it time to grow. Works for me.