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hi this is Wayne Wagner from Visionary wealth management today we're going to talk about your deferred comp plan so many of our clients have access to Executive Deferred Comp plans DCP edcp there's a thousand other acronyms they all function the same way you're given an opportunity once a year usually in the third or fourth quarter to opt into the deferred comp plan for next year so not only are you trying to do your family budget and plan family vacations and all that kind of stuff you're trying to figure out what part of next year's compensation should you be putting away until some indeterminate point in the future most often people choose a lump sum at retirement or defer that money into an account that maybe is going to pay out during the first 10 years of retirement to help with the income or cash flow stream for those first-time years of retirement as clients have been more transient moving between companies these things very often get paid out as lump sums when you leave your company so I want to caution against over using these plans I had a client earlier on in my career who I met him and he was just so jazzed that he put away a hundred percent of his bonus and 25 percent of his income every year for like 18 years before I met him he had like a three and a half million dollar plan balance we strongly curtailed how much he was putting into the plan but when he left the company he still had six and a half million dollars in the plan and guess what it all came out at one time and it all got taxed at the maximum tax bracket awesome not right so strategic planning with deferred comp plans is very very important why should you use them well number one many companies not all but many as you move past the income threshold for the IRS which right now is around 285 thousand dollars so if your base plus bonus is in excess of 285 000 it's important to utilize a Ferd comp plan because many times companies will continue matching your contributions to the deferred comp plan once they're no longer allowed to contribute into the 401K so that this is the qualified plans of the 401K that kind of thing this is a non-qualified plan and very often companies will continue to match dollars contributed above that Internal Revenue code income threshold right now again around 285 thousand dollars so number one strategically use them for for that reason number two you may have specific years where you just know you're gonna have a lot of expenses that year I'll give you a personal example in my world I had my 25th wedding anniversary and my daughter starting College both in the same year so what did I do I put about 75 grand into my deferred comp plan...