How to Insure Your Income: Deferred Compensation as an Income Insurance Tool Conclusion

Deferred compensation is an important and valuable tool. It is an agreement based on the respective needs and objectives of both you and your employer.

A deferred compensation plan enables you to realize a current tax advantage, and allows your employer to realize a tax deduction when the deferred compensation is paid.

Used correctly, the deferred compensation plan can be an effcetive form of disability income insurance. However, it tends to work more effectively for executives and other highly paid employees than for front-line workers.