As a fiduciary financial advisor in Greenville, Holland Capital works with corporate executives who have a nonqualified deferred compensation plan to decide how much to defer, when the payouts should start and how those payments fit into the rest of retirement. Most of the planning happens by video and phone, and in-person meetings are by appointment at the Regus center on North Main Street.
Deferred pay is still your pay. The question is when you receive it.
Greenville has about 73,000 residents, according to Census estimates for 2020 to 2024. Michelin North America and several other companies run their U.S. headquarters in the area.
If your employer offers a nonqualified deferred compensation plan, you can set aside part of your salary or bonus beyond what a 401(k) allows. Income tax on that money generally waits until it is paid to you, though Social Security and Medicare taxes can apply earlier.
The trade is a set of decisions made early, with limited room to change them later. Each one is worth reviewing with someone who must put your interest first.
Deciding How Much to Defer
Deferral elections are generally made before the year the pay is earned. After that, changing the election can be difficult.
We look at your cash needs, your other savings and your expected tax rate in retirement. We compare the tax cost of receiving the income now with the tax cost you may face when it is paid later.
Choosing When the Payouts Start
Most plans ask you to pick a payout date and a form, such as a lump sum or installments over several years, when you defer. Changing that choice later is generally restricted under federal rules, and a change usually pushes the payment further out.
We line up the payouts with your retirement date, Social Security and withdrawals from your other accounts, so the taxes are spread out instead of stacked into a few years.
The Risk Behind the Promise
Money in a nonqualified deferred compensation plan is generally an unsecured promise from your employer. If the company runs into financial trouble, that money may be exposed to the claims of its creditors.
For that reason, we look at how much of your net worth depends on one employer, including any company stock you hold. We also read your plan’s terms for what happens if you leave the company or it is sold.
The Rest of Your Investments
Your 401(k), IRAs and taxable accounts need to work around the deferred pay, not against it.
With investment management, Holland Capital manages those accounts together, around the payout schedule you chose.
How We Work with Clients in Greenville
Holland Capital Management is an independent registered investment adviser and a fiduciary. M. Chad Holland, CFA, CFP® works directly with clients and is responsible for the planning and advice.
For the first review, gather the plan summary or enrollment materials, your latest deferred compensation statement with each year’s distribution election, your 401(k) statement, your most recent pay stub and your latest tax return.
The written plan shows the deferral amount we recommend, when each payout is scheduled and how those payments fit your retirement income.
The first conversation is free. If there is work worth doing after that, we will define the scope and cost before you decide whether to move forward.
Our offices are in Charlotte, North Carolina and Winter Park, Florida. We work with clients in Greenville primarily by video or phone. When an in-person meeting makes sense, we meet by appointment at the Regus center at 220 North Main Street in downtown Greenville.
For clients whose investments we manage, accounts are held directly at Charles Schwab in the client’s own name. Holland Capital manages the investments but does not take custody of client assets. If a client ever needs in-person assistance from Schwab, the closest branch is in Greenville at 12 East Washington Street.
We work with clients throughout South Carolina. You can see the other South Carolina communities we serve here.
Our what we do page explains how a planning engagement works.
RETIREMENT ENGINEERING™
The Order Matters
Five retirement decisions and why timing matters.
Frequently Asked Questions
Can I Change When My Deferred Compensation Is Paid?
Sometimes, but the rules are strict. Plans generally require any change to be made well before the original payment date, and the new date is usually years later. Your plan document sets the exact terms.
Why Use a Fiduciary for Deferred Compensation Decisions?
Holland Capital acts as a fiduciary when providing financial planning and investment advice. With deferred pay, that means advice on deferral and payout choices that is based on your taxes and your plan, not on what we manage.
Money you defer stays with your employer, and our fee is spelled out in writing first.
Is There a Meeting Place Downtown?
Yes, on North Main Street. The Regus center there is where we sit down with clients, by appointment.
Calls and video meetings cover the rest.
Photo: DXR / Wikimedia Commons / CC BY-SA 4.0, cropped.
