If stock awards are part of your regular compensation then treat them that way.
That is the theme you should follow when thinking about all that company stock you’ve been given over the years.
One example is with RSUs. When your RSUs vest, you are immediately taxed on them. That means that, from a tax point of view, the company has just given you a paycheck and you’ve decided to put all of it in your company’s stock.
Now let me ask, would you ever actually do that? I’m guessing no.
So the best strategy (at least as a starting point) is to sell your RSUs as they vest.
Now, what about all those RSUs that have built up over the years? We want to sell those in a tax-smart way, which is a bit more complicated. For more, reach out to me directly at firstname.lastname@example.org
For more details, check out a deeper analysis at www.BestFinLife.com/blog, but in this space I want to simply make the point that this can be very important.
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Best Financial Life is a Registered Investment Advisor with the State of California and Joe Morgan is a fiduciary to his clients at all times.
By Joe Morgan, CFP®, CFA, Principal: Best Financial Life, Resident since 2004