The Microsoft Deferred Compensation (DCP) payout structure is different than what most people are used to when it comes to retirement savings. There is a lot of flexibility when it comes to withdrawing funds from a 401(k) or an IRA – you’re able to withdraw money early (with penalty), withdraw all at once (with important tax implications), or withdraw monthly until funds deplete. Receiving funds from DCP requires more advanced planning to ensure your money comes out on-time, at the right time and in amounts that make sense for you. In this video, Lars Phillips, explains how the DCP payout periods work.

It is very important to consider future income (stock grants, Social Security, and required minimum distributions) when electing your payout period. You will be taxed when you distribute funds. A strategic long-term payout plan will help make sure you don’t have large spikes in income that can result in a higher tax bill. Careful planning will also help you maintain a consistent cash-flow to fund your future lifestyle expenses.

We work with Microsoft employees Level 67 and above to help them save substantially on taxes when deferring large portions of their salary. We work with you to develop a custom plan that looks at your RSU vesting schedule and factors in changes in share price to ensure you have the income you need now and in retirement.

Schedule a time here.