how does deferred compensation affect your taxes 
in a non roth scenario those making contributions to a plan enjoy a tax deduction in that year the funds grow tax deferred until the payout date if you retire in a lower tax bracket or a lower tax jurisdiction you will benefit from the tax deferral upon retirement the bottom linethough a 401 k plan with a matching contribution is technically a type of deferred compensation most people are typically referring to the non qualified form when they talk about deferred compensation financial advisors usually suggest you only use a non qualified deferred compensation nqdc plan after you ve made the maximum possible contribution to your 401 k and only if your employer is very solid financially because nqdc plans are not strictly regulated and your funds may not be protected in the case of company bankruptcy 10 deferred compensation plans are non qualified meaning they don t have to follow certain federal regulations tread carefully 