Life Events: Retirement Plans

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Retirement Planning With Your Stock Options And Other Stock Compensation (Part 3: Post-Retirement Planning) 

Carol Cantrell
Tax planning for retirees can be more challenging that it was during their working years. You need to constantly monitor any options and company stock holdings as part of your overall portfolio. Part 3 looks at special issues that can arise after you retire, including Social Security; coordinating with required minimum distributions for IRAs and your 401(k); moving to another state; and the gifting of stock.

Stockbrokers' Secrets (Part 6): What I Tell My Best Clients About Retirement Planning With Stock Compensation 

W.E.B. Bantling
NEW! Many of my clients use stock compensation to boost retirement savings and lifestyles. Yet I find many do not see it in the bigger picture of retirement savings and withdrawal plans. Considering net worth, age, and company stock plan, I present the client with eight core points about both their stock grants and their 401(k) plans.

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FAQs   (Jump to articles)

What is an "employee stock ownership plan"? 

An employee stock ownership plan (ESOP) is a tax-qualified retirement plan designed to...

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

401(k) plans are a type of broad-based, tax-qualified retirement plan funded by pre-tax contributions, unlike money used to exercise options or buy stock in your ESPP. Company stock in your 401(k) can be sold only for other investments in the plan (not to fund cash needs and purchases). You have more flexibility with the shares from your stock grants because...

Can stock options, restricted stock, or an ESPP affect my other employee benefits, such as 401(k) contributions? 

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...

Can I use company stock or cash in my 401(k) plan to exercise my stock options? 

You cannot use shares of company stock in your 401(k) plan to exercise options, because...

Can I use cash in my IRA account to exercise my options? 

You can, but the tax consequences may make this unwise...

Can options be granted to my IRA instead of to me? 

Perhaps, but this would be unwise, and the shares received at exercise may not be covered...

Can I sell my company stock to my IRA for cash or contribute my company stock to it? 

The sale of property by an owner of an IRA to the IRA is prohibited by the federal tax code...

Can stock option income alone qualify me to establish an IRA? 

According to the tax rules, to be eligible to make contributions you must have...

Does income from stock options affect my payments under disability policies or pension plans? 

It may. Your payments are rooted in your pre-disability or pre-retirement earnings in some way. Courts have addressed this issue...

UPDATED! How do stock grants affect the income limits for contributing to a Roth IRA? 

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

NEW! Does participating in an ESPP affect my ability to contribute to a 401(k) plan or IRA? 

ESPPs are not tax-qualified retirement plans or profit-sharing plans, so participating in an ESPP has...

Can a consultant use the proceeds from an NQSO exercise or restricted stock vesting to fund a Keogh or SEP? 

As long as the NQSOs and restricted stock generate ordinary income, you can...

Can I commit insider trading by buying or selling company stock in my 401(k) when I know important, confidential information? 

Whether you trade your company stock in your regular brokerage account or in...

Are senior executives and directors banned from trading company stock during a 401(k) blackout period? 

Starting on January 26, 2003, during any 401(k) blackout period directors and executive officers...

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