Deferred Compensation Plan | Iron Plan Solutions

Deferred Compensation Plan at Iron Plan Solutions

There are many different types of deferred compensation plans, including qualified plans like cash balance plans similar to a pension plan you create for yourself to rapidly accelerate pre-tax contributions if you’ve neglected your own personal retirement savings. At Iron Plan Solutions, we’ll help you consider your options.

For firms with consistently high profits, Iron Plan Solutions can show you how a deferred compensation plan could work to allow the corporate executives at your firm defer a much larger portion of their compensation for retirement, or to cover shorter term goals. Nonqualified deferred compensation plans (NQDCs) should be considered only if you are already maxing out your qualified plan options, such as your 401(k) contributions, IRAs, or HSAs (health savings accounts). NQDC plans are sometimes known as deferred compensation programs (DCPs) or elective deferral programs (EDPs).

NQDC plans aren’t like other workplace plans. They’re more like an agreement between you and your employer to defer a portion of your annual income until a specific date in the future. Depending on the plan, that date could be in 5 years, 10 years, or in retirement, and funds could be used to pay for any number of things, such as a child’s college tuition, or ultimately, retirement. You can change your deferral amount from year to year, deciding how much to defer each year from your salary, bonuses, or other forms of compensation. This provides a tax advantage, in that you pay only Social Security and Medicare taxes but not federal or state income tax on that portion of your compensation in the year you defer it. So, it has the potential to grow tax-deferred until you receive it. However, some NQDC plans contain significant risks, with the potential for complete loss.

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Our Services

At Iron Plan Solutions, we help business owners and individuals in the U.S., especially those living on the Gulf Coast. Headquartered in Pensacola, Florida, we also spend a lot of time in Houston, Texas, and Baton Rouge, Louisiana, as well as other states. We are true fiduciaries, which means that we have chosen as a firm to place your needs first, above our own and above all else. And as such, we have multiple solutions, services and strategies which we may utilize as part of your customized plan.

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