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Life Events

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Life Events

Life Events explores the role stock grants play in the financial planning for a variety of major personal occurrences.

Browse an overview of this section below, or explore the subsections to the left.

Major topics covered include retirement and retirement plans; paying higher-education costs with stock grants; divorce and its impact; death and the death taxes on your estate; and disability.

Selected Articles

Retirement

NEW! The Great Drawdown: How To Optimize Stock-Based Compensation For Retirement Planning This is premium content

When retirement is unplanned or taken early, there may be a gap between your retirement date and the qualifying age for retirement-plan distributions and Social Security. To bridge that gap, stock-based compensation can help, but its complexity can be confusing. This article seeks to help you factor in stock compensation when you sequence cash flows to cover living expenses in retirement.
Retirement

Retirement Planning With Stock Options And RSUs (Part 1: Pre-Retirement)

Stock compensation can help you save for retirement. Understand the issues and explore strategies that can help your retirement funding.
Retirement

NEW! Living And Working In Multiple States: Challenges For Mobile Employees In The USA This is premium content

Podcast included! Moving between US states, whether to relocate permanently, travel for business, or retire, can involve tax complications for people who have stock compensation. This article presents the tax issues that you may encounter when you leave your home office and cross a state line.
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Death

NEW! Disability And Death: What Happens To Stock Options, Restricted Stock/RSUs, And ESPP Participation? This is premium content

Disability and death are subjects that few people like to think about, but they are important topics for employees who have stock compensation. Every stock plan has provisions on the treatment of equity compensation in the case of these life events, so you and your family members should understand those plan features just in case they come into play. This article presents the common ways in which stock plans treat grants upon the disability or death of employees.
Retirement

Stockbrokers' Secrets: Retirement Planning With Stock Compensation (Part 1) This is premium content

Podcast included! Many of my clients do not see stock compensation in the bigger picture of retirement savings and withdrawal plans. Considering net worth, age, and company stock plan, I present the client with these core points about stock grants, 401(k) plans, nonqualified deferred compensation, and IRAs.
Retirement

NEW! Using Behavioral Finance To Shape Financial Planning For Stock Compensation This is premium content

Emotions can have a powerful impact on financial decisionmaking. The study of behavioral finance, i.e. how people make decisions about investments and other financial matters, can help you to develop a sensible approach to stock compensation and holdings of company stock.
This is simply a selection of the many articles in this section.
Use the navigation to the left to explore all of the categories in this section.

Selected FAQs

Retirement

NEW! What are the top 10 questions related to retirement planning that I should ask about my stock options, restricted stock/RSUs, or ESPP participation?

Retirement savings can be significantly boosted by equity compensation. When factoring stock options, restricted stock/RSUs, or ESPPs into your retirement planning, you should know the answers to the following questions...
Death

What would happen to my unvested restricted stock or RSUs if I were to die or become disabled before the vesting date? This is premium content

The treatment of unvested restricted stock and RSUs upon death or disability depends on the terms of your stock plan and the specifics of your grant agreement. In its 2013 Stock Plan Design Survey, the National Association of Stock Plan Professionals observed the following related practices among the companies in its survey group...
Death Taxes

After my death, at what times might my stock options be taxed?

Stock options that you hold when you die can be taxed twice...
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Retirement Plans

How do stock grants affect Roth IRA contributions and conversions? This is premium content

The grant itself has no impact. The compensation income generated from exercise or vesting can affect...
College Funding

UPDATES! To seek financial aid for my children's college tuition, I need to report my income and assets to the US Department of Education on the Free Application for Federal Student Aid (FAFSA). Should I list my stock grants? At what value? This is premium content

As long as the student is considered a dependent of the parent for financial-aid purposes, the parent does have to report stock options on line...
Death

What would happen to my vested stock options if I were to die before exercising them?

You need to review the terms of your company's plan and your grant agreement. In most cases, the options...
Divorce

Is my spouse entitled to part of my stock options and other stock grants upon our divorce?

While there are some general trends, the treatment of stock options, restricted stock, and other equity awards in divorce is far from similar in all states. In general, the outcome depends on four factors...
Disability

What happens to my stock grants if I become temporarily disabled?

Under some stock plans, if you are temporarily disabled and your employment is not terminated, you...
Retirement Plans

How do stock options, ESPPs, and restricted stock differ from the company stock fund or contribution offered under my 401(k) plan? This is premium content

401(k) plans are a type of broad-based, tax-qualified retirement plan funded by pre-tax contributions, unlike...
Retirement Plans

Can stock compensation affect my other employee benefits, such as 401(k) contributions? This is premium content

With a few exceptions, the grant, vesting, or exercise of stock options, or the vesting of restricted stock, should not affect your other retirement-plan benefits. One notable exception...
This is simply a selection of the many FAQs in this section.
Use the navigation to the left to explore all of the categories in this section.