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Deferred compensation is only worthwhile if you believe that your future marginal tax rate is going to be lower than your current tax rate.


Other things to consider are, as pointed out, State Tax, AMT and do not forget to consider the time value of money. If it is deferred compensation and is not growing or growing at 3% or at 9% these rates can make a bigger difference than just the marginal tax rate.

What kind of discount rate you should apply to determine the best NPV to you!??

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