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The deferred comp will "hide" the money until after age 59 1/2, when you can start to withdraw without penalty after retirement. But the tax is still owed, as you well know. So, for example, you have accumulated $1M by the time you retire. As you withdraw funds from the account, you pay the tax man(and the state tax man, depending on the state.) In NY, which for certain individuals forgives $20K per year for state tax, you really have about $800K or less, not the $1M as the statements show, depending how you pull it out and how often. Just thought I would add that the discussion.
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