Outearning Your Financial Strategy?

Two Expen$$$ive Time Bombs

Has your income suddenly become more complex? Gone are the days of a straightforward salary, plus bonuses and maybe commissions.

To get where you are, you've taken on more responsibility and achieved higher-level decision-making abilities.?And now you need to do the same when it comes to your earnings.

Feel like you're cautiously walking through a minefield of acronyms when you're reviewing your options?

ISOs, ESOPs, RSUS, NQSOs, SERPs, plus deferred comp, vesting, perquisites, 10b5-1 plans… the list goes on.

You may or may not be familiar with everything in your compensation package. Either way, you know you need to capitalize on it.

Right now, you're not entirely sure what the ideal strategy is.

If your relationship with your benefits package was a social media status, it would say "it's complicated." Sure, you have the smarts to figure it out yourself. But you've got more urgent tasks to deal with, and you really don't think you have that kind of time anymore.

In terms of money and career, you're on a more advanced level now. Before you leveled up, your financial life might have been simple enough that you didn't need advice.?Or maybe you relied on your friend from college who now works in finance to give you some ideas or look over your choices. You might have even asked for guidance from another colleague who seemed pretty savvy about the company benefits.

When it comes to complex compensation, what's right for someone else isn't necessarily right for you. You want to know that you're making wise decisions with your money.?You've outgrown your prior title and compensation structure, and in the process, you may have outgrown your money mavens, too.

You potentially have the ability to stash away serious cash for your family and your retirement. But what are the hot opportunities that come with your new benefits, and how do you develop a solid strategy for your own personal situation?

If you're not sure how to capitalize on your new capital complexity, you're in the right place.

This quick read is designed to help you uncover the benefits of your executive compensation and what potential landmines may be lurking below the surface.?Find out what you need to know and the questions you need to ask to prevent the unexpected from lowing up in your face.

Right now, you may be asking yourself questions like these:

• How do I maximize the promise of the benefits I now have access to?
• What are the tax advantages and disadvantages of all my choices?
• What don't I know about my package?
• What happens if I don't make the right decisions in time?
• Do I have a compensation professional already in my corner?

If these questions resonate with you, keep reading...

Time Bomb #1

Tax Analysis Paralysis

The tax aspects of executive compensation can be tricky, especially if you're not used to dealing with them. Unfortunately, getting them wrong could explode in an expensive tax bill.

When done right, company shares can be turned into income that's taxed at the lower long-term capital gains rate.But when not done right, you could end up being taxed at your marginal income rate instead. Incentive Stock Options (ISOs) and Non-Qualified Stock Options (NQSOs) operate differently and require separate strategies to ensure that you ultimately achieve your goal of long-term capital gains taxes.

Also, make sure you understand what perks are taxable in any given year (and other factors you need to consider).When it comes to income tax, surprises are usually a bad thing! Especially when you're in a high tax bracket.

Critical questions to ask about the timing of taxes include:

• Do I understand the tax timing of each part of my compensation?
• Is it better to exercise some choices now rather than wait until later?
• Have I properly assessed the relative importance of all the factors I need to consider?

Have I talked about the impact of timing with a financial professional?

TIME BOMB #2:

Missing Out

What happens if you don't take advantage of the perks that you've been given??Most of these benefits have precise dates for when you have access to the privileges (vesting) and how long you have until they expire.

Equity plans often issue new grants every year, making it easy for recipients to lose track of what's available and when.?You don't want to lose out on a profitable opportunity because some of your benefits have expired.

On the other hand, if you stay on top of your grants, you'll accumulate shares. At some point, you may even need to sell some equity just to diversify your portfolio.

But if you're considered an insider, a Rule 10b5-1 plan may be necessary.?If you don't already have one in place, you might not be able to sell your company shares.

Critical questions to ask about potential omissions include:

• Do I have anything with a timeline I need to keep track of?
• If so, what is my strategy to avoid allowing any benefits to expire worthless?
• Do I need a Rule 1065-1 plan, and if I don't need one now, will I in the future?
• Have I discussed my strategy with a financial professional to avoid missing out on benefits?

Find the Highest and Best Use of Your Complex Compensation (And Time)

At work, you prioritize your activities to get the most important tasks done first. You fill up your jar with the big, important rocks first and worry about the pebbles later. Why wouldn't you want to do the same for your finances? Making the wrong choices with your new pay package could result in higher taxes than necessary and a smaller nest egg than you would otherwise have. It's critical to make smart decisions promptly, so you don't end up leaving any money on the table.

Once you start playing in the big league, matters get very complicated, very fast.?Strategies and teammates that worked in smaller arenas may no longer be a good fit. It would be best if you had experienced coaches who can give you good advice on the transition. The solution you seek is specific to your personal circumstances.

The sooner you get clarity on exactly which benefits are available and the relevant timelines, the faster you can build a solid strategy for your personal situation. We have the experience to help guide you through complex landmines. Book your?FREE customized Compensation Opportunities Session?today so you can get started on maximizing your income.

We will help you determine if there are things you don't know and clarify the consequences of taking one action instead of another. We're professionals in helping high earners like you uncover and leverage the benefits that fit their personal scenarios.

You've already made a smart investment by taking the time to read through this blog. Make the next wise move by calling or emailing us now to set up your complimentary?Compensation Opportunities Session.

Tim Sedivy, LUTCF?

Consortio Wealth Strategies

(773) 234-6306

[email protected]

https://consortiowealth.com