How to Repurpose Cash Flow for Executives & other High Salaried Workers in a Covid Economy
Why throw away money in badly crafterd Executive Salary Packages?
Here is an example – leaving the bottom $40,000 of earnings be and focusing on the next $60,000:
Marginal rate of income tax is around 24% – which is $16,400 straight down the Rat Hole. Add to that over 15% in respect of FICA – say $9,000 disappearing from an executive’s wage packet plus another $9,000 paid by Employers in FICA.
Add up all that lost money wasted – Close to $34,400.
Can you think of better things to do with those dollars?
A starting point could certainly be to put it all in to an Executive Retirement plan – such as a 401k plan. That could pull an additional $5,000 out the hat as a reward for a maximum personal contribution by the worker of $19,500 .
At a time when Employers retrograde financial management thinking (inspired by Accountants) is creating further waves in the Covid Economy – cutting back on or abandoning Employer Matching Contributions to workers funding of their personal 401k – there could be a shot in the arm for Executive Retirement Programs, as there is sufficient cash left over after allocation to Employee Personal 401k Contributions to be able also to fully maximum fund a Matching contribution by Employers – without it costing them a cent.