There's no shortage of articles, books, and podcasts on financial topics like saving for retirement. But these materials are often designed to appeal to as broad an audience as possible, which can dilute the value of the advice they provide. Corporate executives often have a different pay and benefits structure than other W-2 employees, which means having a specialized financial plan is key to gaining financial independence. Here are three factors every corporate executive's financial plan should address.

Optimizing Benefits

For many corporate executives, salary alone is a fairly small component of the total compensation package. Executives may be treated to stock options, performance bonuses, and other perks that aren't often addressed in financial articles and podcasts.

A financial professional can show you how to leverage these forms of compensation in a way that allows you to maximize your tax savings. For example, you may be able to control the timing of your bonus to split it between tax years, receiving half now and the other half next year. In some cases, this may be enough to keep you from entering the next tax bracket for either calendar year, ensuring that the entire bonus is taxed at a lower rate than it would be if distributed in one lump sum. 

Creating Multiple Income Sources

Corporate executives can be quite well-paid. But it's rare to spend your entire career with one employer. Experts estimate that for each $10,000 in salary a jobseeker plans to demand, they'll need to add one month to their job search.¹ This means that someone earning $50,000 can expect to be re-employed within six months, while an executive who earns $250,000 could be looking at a more than a two-year job hunt. And as the COVID-19 pandemic has shown, these types of industry-decimating events can occur suddenly and without much warning. 

A good financial plan will allow you to weather an extended period with no income. By working with a financial professional, you'll be well-positioned to weather whatever life (and the economy) may throw at you.

Mitigating Risk

In most jobs, unless you commit a reckless or criminal act, you don't need to worry about facing any legal consequences for a decision you made on the clock. But corporate executives can be vulnerable to civil lawsuits or even government enforcement actions for making routine business decisions like layoffs, stock sales, or acquisitions. Your comprehensive financial plan needs to mitigate the legal and financial risks you face, whether through malpractice insurance, an umbrella insurance policy, or even a trust. Your financial professional can evaluate the risks you face and help you develop a customized plan for your situation.

Not only can this type of plan protect you from financial liability, but it can also provide you with the mental freedom to make tough or unpopular decisions without worrying that you'll be sued—instead, you'll have a plan to deal with the when, not if, of any future legal action. 

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

The information provided is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you consult with a qualified tax or legal advisor.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

¹ money.usnews.com/money/blogs/outside-voices-careers/articles/2018-07-13/how-to-cope-with-a-prolonged-job-search#:~:text=The%20general%20rule%20of%20thumb,one%20month%20of%20job%20search

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