via Wall Street Journal
For many highly paid executives, retirement isn’t just about capping off a career, or figuring out what they are going to do for the next phase of their lives. It’s also about juggling large payouts from the stock awards and deferred compensation they may have accumulated over the years.
Executives can minimize the tax hit and smooth out income from such corporate perks in the early years of retirement, financial planners say, but it is important that they start the process one to two years before they plan to leave. Among other things, advisers recommend that executives take an inventory of what their short-term cash-flow needs will be in retirement and review company policies on how and when they can draw down deferred pay.
“For many executives, the year they retire is their biggest salary ever because of all the lump-sum payments” their plans mandate, saysLisa Brown, a financial adviser at Brightworth LLC in Atlanta who works with retiring executives. “Map out your plan.”