High-net-worth executives often carry a range of unique assets, from stock options to deferred compensation. It takes an astute financial planner to make sense of these different sources of income and how to deploy them to maximize an executive’s long-term financial goals. At Peak Financial Group, we provide financial strategies for those already at the top of their profession that are designed to help them remain financially secure for years to come. Here are four executive compensation strategies we often use while working with our high-net-worth clients.
Consider Maximizing the Power of Stock
Many executives receive some form of stock compensation as a way of ensuring they’re invested in the performance of their company. There are a range of different strategies for minimizing an executive’s tax burden depending on the type of compensation. For instance, if an executive receives restricted stock units, those shares will typically become taxable once they vest; however, the executive may choose to make an 83(b) election, which would enable them to pay taxes on the current value of the stock, instead of the future value at the time of vesting. Assuming the stock value rises over time, this is just one way to potentially minimize an executive’s tax burden.
Design a Plan for Deferred Compensation
In addition to stock compensation, high-net-worth executives frequently have a deferred compensation plan they receive upon retirement. A financial planner can offer guidance on the best way to receive this money, whether it’s in a lump sum or paid out over time. By crafting a plan for deferred compensation, we’re able to help clients maintain their current lifestyle.
Begin Planning Before Retirement
Executives are busy running companies. Understandably, that means they may not be spending a lot of time thinking about their tax burdens, cash flow, or other assets upon retirement. But just as with any other client, the financial planning process is best started sooner rather than later. By working with a financial planner early on, a high-net-worth executive can create a plan that will benefit them throughout their entire career and beyond.
Stay Involved in the Client’s Life
The specific components of an executive compensation package may change from year to year. A financial advisor can help a high-net-worth executive not only minimize tax burdens but also design compensation packages and assets that make the most sense for them.
Start maximizing your assets for retirement now. At Peak, our goal is to do more than simply offer advice; we strive to be trusted confidantes to our clients. Get in touch with us to learn more about our range of tailored financial services for high-net-worth executives.
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