Individual Tax-Advantaged Plan Design

Individual Tax-Advantaged Plan Design


Many people view taxes as a fixed and necessary expense resulting from the privilege of earning income. While necessary, income taxes are not fixed. Proper tax planning can assist in efficiently addressing the tax burden within each step of the “tax chain”.

The tax chain comprises the three forms of taxation within each step of the value chain:

  • Taxes in the beginning of the value chain – on earned income
  • Taxes in the middle of the value chain – on interest and dividends
  • Taxes at the end of the value chain – on capital appreciation

The Pacific Group conducts an in depth analysis of the structure of each individual’s ongoing tax liability within each step of the value chain. We work closely with the client to design and implement effective, value-add structures within each chain to address the specific needs and unique circumstances of each individual client; with the goal of helping the client efficiently address the tax burdens in the context of their overall financial strategy.

The structures we design fall under two broad categories:

  • Statutory Plans: Primarily through the use of qualified and non-qualified deferred compensation plans, including 401(k), Section 409(a), Section 457, Profit Sharing and Cash Balance Plans.
  • Synthetic Plans: Primarily through the use of forward derivative products and contracts coupled with third-party financing when necessary.