Deferred comp

Deferred Comp (NQDC / 409A) Election Analyzer

A thin orchestration layer over the planfi MCP (https://ai.planfi.app/mcp/free). All deferral economics, election-year tax, distribution-year bracket / IRMAA smoothing, and creditor-risk math live server-side. This skill only gathers inputs and calls the tools — it does not compute anything locally, carries no defaults of its own, and is read-only.

Related skills: for RSUs / ISOs / NSOs / ESPP valuation and single-stock concentration, see equity-comp-planner (analyze_equity_compensation). For owner-operators stacking a 409A election on top of a Solo 401(k) / SEP / defined-benefit plan, see self-employed-planner (analyze_self_employed_retirement). For the broader bracket / NIIT / IRMAA and Roth-conversion sequencing the distribution years feed into, see tax-optimizer (analyze_advanced_taxes, analyze_irmaa, analyze_roth_conversion).

Step 0 — Make sure the planfi tools are connected

This skill uses these tools (may be namespaced, e.g. mcp__planfi__analyze_deferred_comp): analyze_deferred_comp, analyze_advanced_taxes, analyze_irmaa, analyze_roth_conversion, plus optional generate_financial_plan (to mint a plan_id for chaining + a share_url). Use whichever name your environment exposes (bare or mcp__planfi__-prefixed); below they are written bare.

If they're NOT available, tell the user to connect the MCP, then continue:

claude mcp add --transport http planfi https://ai.planfi.app/mcp/free

Try free, then add your key. The command above adds the free connector — https://ai.planfi.app/mcp/free (no key needed). Once you create an API key, add a new connector with the MCP url — https://ai.planfi.app/mcp — and authorize it with your key.

(On claude.ai: add a custom connector pointing at https://ai.planfi.app/mcp/free.)

Access — free for personal use. The planfi MCP is free to try (a small monthly allowance, no key needed). Heavy automated abuse forced us to add limits — but it stays free for personal use: email [email protected] and we'll send you a free API key, no charge. (Companies and commercial use have paid plans.) To use a key, pass it as an Authorization: Bearer pft_… header in your MCP client config.

Step 1 — (Optional) build a plan first to chain context + get a share link

If the user has (or wants) a full household model, call generate_financial_plan once and capture the returned plan_id (+ share_url). analyze_deferred_comp accepts { plan_id } (plus inline overrides) and uses it to derive filing status and to attach the plan's share_url — the specialist tools do not emit a share link themselves, so this is the only way to give the user one. This step is optional: analyze_deferred_comp runs cold from raw inputs too.

Engine facts to bake in: all dollars are today's (real) dollars; all decimals are fractions (37% → 0.37, 5% growth → 0.05); tax brackets / limits are approximate ~2026 values (noted in disclosures). NQDC deferrals sit above the §402(g) qualified-plan cap.

Step 2 — Route by intent

intent → analyze_deferred_comp

"Should I defer my bonus?" · "NQDC lump vs installment" · "409A election — defer now or take now?" · "defer salary past my 401(k) cap" · "what's the creditor risk of my deferred comp?" · "smooth my NQDC payouts to avoid IRMAA" · "spread my deferred comp over 10 years in early retirement"

Always CALL analyze_deferred_comp for these — do not answer from general knowledge / quote rules of thumb from memory. When the user gives the numbers, run it and lead with its real output. Trigger condition: if the user supplies a deferral amount and either a working marginal rate (or enough income context to stack one) or a plan_id, CALL the tool. Do not hand-wave "deferring is usually good if your bracket drops" — the answer depends on the lump-vs-installment IRMAA tiers, the §114 state bar, and the employer's creditor-risk haircut, all of which the tool computes. Lead with its recommendation (defer_installment / defer_lump / take_now) and the risk-adjusted PV advantage, not a heuristic.

Models the defer-now-vs-take-now tradeoff: the election-year tax deferred (fed marginal + state + 0.9% Additional Medicare at vest under the special-timing rule), lump-vs-installment distribution and how installments smooth federal brackets + Medicare IRMAA tiers into low-income FIRE bridge years, and employer unsecured-creditor risk as a hazard-rate haircut on the deferred balance.

REQUIRED: deferral_amount (annual $ electively deferred past the §402(g) cap). Optional: current_marginal_rate (working-year all-in fed marginal, e.g. 0.37; if omitted the server stacks the deferral on other working income), filing_status (single | married_joint, default married_joint), distribution_election (lump | installment, default installment), installment_years (default 10 — 10+ preserves the §114 former-state tax bar), distribution_start_age (default 65), other_bridge_income (other taxable income in the distribution / FIRE-bridge years the slices stack on, default 0), employer_credit_risk (investment_grade | speculative | distressed, default investment_grade), growth_rate (REAL pre-tax in-plan growth, default 0.05), tax_year (default 2026), plan_id, overrides.

analyze_deferred_comp({
  deferral_amount: 200000,
  current_marginal_rate: 0.37,
  filing_status: "married_joint",
  distribution_election: "installment",
  installment_years: 10,
  distribution_start_age: 62,
  other_bridge_income: 0,
  employer_credit_risk: "investment_grade"
})

Returns: recommendation + recommendation_reason; tax_deferred_at_election; grown_balance_at_distribution; defer_now_after_tax_pv vs take_now_after_tax_pv + deferral_advantage (delta PV); bracket_smoothing_savings (lump_marginal_rate, installment_marginal_rate, irmaa_tiers_crossed_lump, irmaa_tiers_crossed_installment, effective_distribution_rate); creditor_risk_haircut_pct + risk_adjusted_defer_pv; and a per-year schedule of gross distributions.

"Confirm the full all-in tax bite on the election or distribution year" → analyze_advanced_taxes

After analyze_deferred_comp, run the working (election) year and a distribution year through the full federal model (brackets, NIIT, Additional Medicare, AMT) to confirm the all-in rate. This is the server-suggested next_actions[] chain — follow it rather than re-deriving the rate by hand.

"Does a lump or big installment slice trip a Medicare IRMAA surcharge?" → analyze_irmaa

Pass the distribution-year MAGI (other_bridge_income + the per-year slice) to quantify the IRMAA Part B/D surcharge a large slice triggers, and confirm the installment path stays under the tier-1 threshold.

"Fill the empty bridge-year brackets before the NQDC stream starts" → analyze_roth_conversion

In the low-income years between deferral and the distribution start age, model filling the empty brackets with Roth conversions before the NQDC installments push income back up.

Step 3 — Surface the result honestly

• Lead with the headline — the recommendation (defer_installment / defer_lump / take_now) and recommendation_reason, then the deferral_advantage (risk-adjusted PV delta), tax_deferred_at_election, and the lump-vs-installment IRMAA tier comparison.
• Read back assumed_defaults[] — analyze_deferred_comp returns a structured assumed_defaults[] of { field, assumed_value, note } for every input it defaulted (filing status, bridge income, growth rate, credit rating, …). Read these back so the user can correct any silent assumption (e.g. other_bridge_income assumed $0 — a higher FIRE-bridge income raises the distribution marginal rate and IRMAA).
• Surface the creditor-risk caveat — the deferred balance is an unsecured claim against the employer; it is surfaced net of a credit-rating hazard haircut (creditor_risk_haircut_pct), not at full liquid value. Say so explicitly when the rating is speculative / distressed.
• Note the §114 state rule — a qualifying 10-year-or-longer installment stream is shielded from the former working state's tax; shorter installments may not be. Flag it if installment_years < 10.
• Honor disclosures.not_advice (a boolean) — present results as planning estimates, not tax/legal advice.
• Follow next_actions[] — each { tool, why, prefilled_args:{ plan_id } } chains to analyze_advanced_taxes, analyze_irmaa, or analyze_roth_conversion. Use the server-suggested chain rather than guessing.
• share_url — only present if you minted a plan_id via generate_financial_plan; offer it so the user can open the full interactive plan on planfi.app.

Recommended call sequence (typical session)

1. (optional) generate_financial_plan → capture plan_id (+ share_url).
2. analyze_deferred_comp({ deferral_amount, current_marginal_rate | plan_id, … }) → lead with the recommendation.
3. Read back the headline + assumed_defaults[] + the creditor-risk / §114 caveats.
4. Follow next_actions[] → analyze_advanced_taxes / analyze_irmaa / analyze_roth_conversion.

Fictional examples

1. "I'm an exec, MFJ, top bracket. Should I defer $200k of my bonus into the 409A plan and take it over 10 years starting at 62?" → analyze_deferred_comp({ deferral_amount: 200000, current_marginal_rate: 0.37, filing_status: "married_joint", distribution_election: "installment", installment_years: 10, distribution_start_age: 62 }). Lead with the recommendation (likely defer_installment), the tax_deferred_at_election (~37% fed

• 0.9% Additional Medicare), and that the 10-year installment keeps MAGI under the IRMAA tier-1 threshold (irmaa_tiers_crossed_installment ≈ 0) while a lump would cross several. Read back assumed_defaults[] (bridge income assumed $0, growth 0.05, investment-grade employer).

2. "My employer's credit rating is shaky — is deferring $150k still worth it?" → analyze_deferred_comp({ deferral_amount: 150000, current_marginal_rate: 0.35, employer_credit_risk: "distressed" }). Lead with the recommendation — the hazard haircut (creditor_risk_haircut_pct) on the unsecured balance can flip the answer to take_now even when the raw tax math favors deferring. Surface the risk-adjusted PV vs the take-now PV.

(Both examples use fictional figures — never reuse a real user's numbers in documentation.)

Notes

• All decimals are fractions; all dollars are today's (real) dollars; brackets/limits are ~2026.
• analyze_deferred_comp has ONE required field, deferral_amount — everything else defaults server-side and is reported in assumed_defaults[]. Pass current_marginal_rate or a plan_id for a meaningful answer.
• The deferred balance is an UNSECURED claim against the employer — surfaced net of a credit-rating hazard haircut, NOT at full liquid value, and NOT counted as a liquid asset / debt.
• 0.9% Additional Medicare applies at election (special-timing rule); no FICA or NIIT applies at distribution. 4 USC §114 bars the former working state from taxing a qualifying 10-year-or-longer installment stream.
• Only generate_financial_plan returns a share_url — chain it for a sharable link.
• Not financial, tax, or legal advice. Planning estimates only.