Why Life Insurance is Often Used to Informally Fund a Nonqualified Deferred Compensation Arrangement
The changing demographics of the United States are having a profound effect on the labor supply in the nation. The population is aging, with the number of baby boomers reaching ages 65 and over expected to outnumber those ages 18 and under by 2034. (1) This is contributing to a tight labor market. At the onset of 2023 the labor market was historically tight with two job openings for every unemployed person. As a result, business clients are increasingly asking their financial advisors about how they can establish a nonqualified deferred compensation plan to retain their most valuable key employees.
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