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Deferred compensation is a benefit primarily available to corporate executives. In this video, Michelle Smallenberger from Financial Design Studio explains key aspects of deferred compensation. It refers to income earned today that individuals choose to receive in the future. There are two main reasons to utilize this benefit: tax savings and financial planning. By deferring income, individuals can potentially move to a lower tax bracket later, reducing their tax burden. The tutorial also addresses key timing considerations regarding taxes and decisions to make when opting for deferred compensation, as well as the associated pros and cons of this financial tool.
