In the world of income and wealth management, there are specific arrangements between the employer and the employee that aim to benefit the latter in the long run. A deferred compensation is one of the best examples of such arrangements. It involves withholding a portion of the employee’s salary until a specific date. The date, which is usually the employee’s retirement, is the day when the withheld salary is given. Deferred compensations for AZ employees are typically given to those who belong in the rank and file in the form of retirement plans. The top-level managers, on the other hand, may also receive a similar arrangement in the form of life insurance, stock options, or annuities.
The Benefits and Advantages
But how huge is the impact of deferred compensations? Are they worth the effort on the part of the employers? Let us take a look at some of the key advantages it offers.
- Substantial savings – as an employee, you will get to enjoy a significant amount of savings through deferred compensations. If you have a pension plan or a separate retirement plan, you can hold the payouts from the deferred compensation to beef up your savings. Eventually, you can use the payouts on your home mortgage, the college expenses of your children, and other forms of financial obligations.
- Income after retirement – as mentioned above, deferred compensations often serve as retirement income. A common form of retirement income that is usually connected to deferred compensations is the annuity. It works by paying the certain employee amounts of money for a specific number of years. Also, employees who reach the retirement age can also convert into cash their life insurance coverage that is tied to deferred compensation. The money that they will get, in turn, can be re-invested in various financial options or they can spend it all if they wish to do so.
- The tax benefits – there are also some tax benefits that they can enjoy through deferred compensations. Most of the contributions paid by the employer to the deferred payments are more often than not non-taxable. When it comes to the dividends and interests, the same thing also applies. What is taxed, however, are the amounts that are withdrawn.
- The potential for growth – lastly, deferred compensations that are offered to the employees in the form of stock options or investment accounts have the potential to grow substantially and exponentially. Considering the many years in between while you are still working to the day you retire, the money invested in stock options can dramatically increase, giving you more money that you can use and enjoy with your family.
The Need for a Retirement Planning Company
Since dealing with these matters require the help of experts, you need to find a reputable retirement planning company capable of guiding you when it comes to deferred compensations for AZ employees. At BettenCourtFG, we help clients choose the best types of annuities that perfectly suit their needs and requirements.
Reasons to Trust Us
Our team uses a modern investment approach that is anchored on our sense of traditional focus. We are equipped with the right knowledge and expertise when it comes to securing people’s retirement income. To learn more about our services, fill out our online contact form, and we will get back to you, ASAP!Deferred Compensations For Az Employees