Deferred compensation plans can help businesses recruit and keep key talent—and that’s a big deal for those that want to survive and grow.
In these “golden handcuffs” arrangements, employers and employees agree to withhold part of an employee’s ongoing salary, bonuses or other pay until a future date—usually around retirement.
Deferred compensation lets the most important employees stash away more retirement money than they’re allowed to with rank-and-file retirement plans. Like 401(k)’s and similar plans, deferred compensation funds are shielded from income tax. The money can grow tax-free until it’s cashed out at retirement—and by then, recipients are likely to be in lower tax brackets. No wonder deferred compensation is popular with executives!
To read the full, original article click on this link: Deffered Compensation and its benefits for employers
Author: Steve Garmhausen
