Golden Handcuff or Parachute?

By Robert DeVries

There’s no question that wealth planning requires careful attention to detail and flexibility at any and every income level, and business leaders are no exception. In fact, the many privileges and rewards that come with increasing levels of financial success often also come with constraints and common pitfalls. The complexities of these “golden handcuffs” can seem daunting if you don’t have the proper tools and knowledge to navigate the landscape of your financial future.

The complications of these otherwise advantageous financial opportunities often can be traced back to the variability in annual income they create for business leaders, and the uncertainty this brings. Factors like bonuses, deferred compensation, and stock awards contribute a level of unpredictability regarding your current and future earnings. So how can you avoid feeling like you’re on shaky ground in this ever-fluctuating environment? While it may seem overwhelming, there are proactive steps you can take to optimize your situation. These include:

  • Take advantage of deferred compensation plans to reduce your income taxes
  • Monitor when you will receive stock grants to avoid higher marginal tax rates
  • Exercise your stock options without using cash reserves or loans to pay the resulting income taxes
  • Utilize the guidance of your WealthCoach™ to integrate these actions so they work together and build upon each other

The increased range of compensation caused by these factors make it all the more important to have an integrated WealthPlan™ that contemplates various “what if” scenarios. Updating your plan frequently to take into account changes in your current, deferred and stock-based compensation can help you confidently take advantage of the wealth-building these opportunities create.  Alleviating some of the stress that so often accompanies the benefits of financial success with these steps in mind may be the key to loosening those golden handcuffs and turning them into a golden parachute.

To see if you are on track, enjoy many of the free resources available on our web site or call our wealth services firm in Satellite Beach, FL – Melbourne/Brevard area at (321) 773-7773 to schedule your complimentary consultation.

You should not assume that any discussion or information contained in this publication serves as the receipt of, or as a substitute for, personalized investment advice from FirstWave Financial. A copy of the FirstWave’s current written disclosure statement discussing our advisory services and fees is available upon request.