Timothy Sumer

The definition of deferred compensation is exactly how it sounds: As an employee, you choose to defer compensation until a later date. This could lead to tax savings, but there are some substantial risks worth talking about.  When people mention “deferred comp,” they are typically referring to non-qualified deferred compensation plans, not qualified plans, such as 401(k)s, or 403(b)s. First, we will discuss how they work, then we will dive into the benefits, risks and considerations. With a non-qualified deferred comp plan, you’re given an opportunity once a year to opt into the deferred comp plan and elect how much money you would like to receive at a specified future date or over several specified future dates. Depending on your plan these future dates may be required to pay when you retire or when you leave the company. Often, the employee gets to choose a “distribution date” each year and select the amount of monies they intend to defer, and when they would like to re