I just got a promotion at work and that makes me freshly eligible to participate in employer provided Deferred Compensation program. I am able to defer up to 75% of my salary and up to 100% of my yearly bonus, both pre-tax (part of the "deferring" is to defer paying taxes). The deferred amount is invested in funds (haven't fully consumed the program specifics yet), and can be disbursed at a future date over N years, typically when one has retired and hence is on a lower tax bracket. This disbursement schedule has to be chosen well in advance (at the time of deferral) and cannot be easily changed.
At max, I am able to defer up to ~200K this way per year. Of course, the risk is this is basically an unsecured loan to my employer from me. The employer is a super-megacorp that I believe should be around in the next 10 years when I plan to retire (knock on wood, just in case). This program would help me, because lets just say that the Biden tax (>400K) has already started biting me hard - so this deferral will help me reduce my taxable income dramatically below that line.
My yearly spend (incl. mortgage, medical thru employer) is 90k. I want to leave enough in my base to max out 401k (both pre-tax and the post-tax max). I can sell my vesting RSUs (stocks) to make cash to live on.
I would appreciate any advice from folks familiar with such plans, who actually used such a plan to RRE (Retire Really Early). I didn't find any calculators online for this plan, and doing some research it seems like it requires professional services to properly plan. Hoping the great community here can help me prepare better. Thanks in advance!
At max, I am able to defer up to ~200K this way per year. Of course, the risk is this is basically an unsecured loan to my employer from me. The employer is a super-megacorp that I believe should be around in the next 10 years when I plan to retire (knock on wood, just in case). This program would help me, because lets just say that the Biden tax (>400K) has already started biting me hard - so this deferral will help me reduce my taxable income dramatically below that line.
My yearly spend (incl. mortgage, medical thru employer) is 90k. I want to leave enough in my base to max out 401k (both pre-tax and the post-tax max). I can sell my vesting RSUs (stocks) to make cash to live on.
I would appreciate any advice from folks familiar with such plans, who actually used such a plan to RRE (Retire Really Early). I didn't find any calculators online for this plan, and doing some research it seems like it requires professional services to properly plan. Hoping the great community here can help me prepare better. Thanks in advance!