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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 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.

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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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.

NEW! Using Behavioral Finance To Shape 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.

Retirement Planning With Your Stock Options And Other Stock Compensation (Part 2: Retirement Year) This is premium content

Once you reach your retirement year, the decision landscape and timeframe change. To avoid unpleasant surprises, understand what will happen to your stock grants and other company benefits so that you can develop appropriate strategies.

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

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.

A Holistic Approach To Managing Equity Compensation This is premium content

Podcast included! Planning for equity compensation begins with identifying the role stock grants will play in your life, whether for retirement, college funding, or other goals. This article offers points to consider for three different types of investors.

Switching From Offense To Defense

Financial Advisor
The five years before and after retirement are the "critical zone" for financial planning, including that related to your stock options.

FAQs

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...

Do stock option plans treat early retirement differently from ordinary retirement?

Early retirement may be treated less favorably. According to a survey by the National Association of Stock Plan Professionals...
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I am eligible for vesting acceleration at retirement but have not actually retired, so why has my restricted stock been taxed? Is the treatment different for RSUs? This is premium content

These provisions raise tax complications for both restricted stock and RSU grants, though the issues vary. For tax purposes it does not matter that you must actually retire to vest the shares. With restricted stock, taxation is triggered when the grant is...

What are the most common periods after termination during which stock options can be exercised? Does the reason (e.g. disability, early retirement) matter? This is premium content

Usually, you will have time after you leave the company to exercise your options. However, some companies...

If I leave my company to retire, will I have a longer period to exercise my vested options than I would if I left to take another job? This is premium content

Retirement is a termination of employment under your stock option plan. Under almost all stock option plans, after you terminate employment the plan specifies...

My post-retirement exercise period is longer than the remaining term of my stock options. Which term applies after I retire? This is premium content

The standard rule is that options are exercisable until the end of either their term or a post-termination period your plan gives you, whichever...

What would happen to my performance share grant if I were to lose my job, retire, become disabled, or die? This is premium content

The outcomes can vary and depend on your plan's design. If you leave your company to take another job before the end of the performance cycle, you usually lose all right to receive the grant. Surveys show that in these situations...

If I leave my company to become a consultant, retire, or take another job, will taxes be withheld from my equity grants as they were when I was an employee? What if I live in another state when I receive the income? This is premium content

Most companies base withholding on your employment status at the time of grant. If you work elsewhere or are retired at exercise or vesting, then...

Does my stock option exercise or restricted stock/RSU vesting affect the annual earnings limit of Social Security and reduce my benefits? This is premium content

When you start receiving Social Security before you reach the full retirement age, your benefits are reduced by a complicated formula. However, stock options received for services before retirement...

When should I start taking Social Security benefits? What role can stock compensation play in my decision?

No simple answer exists to the question of whether you should take benefits early, at the age you are considered at "full retirement" as defined by Social Security rules, or at a later date. Two useful...
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Annotated diagram of Schedule DTax errors can be costly! Don't draw unwanted attention from the IRS. Our Tax Center explains and illustrates the tax rules for sales of company stock, W-2s, withholding, estimated taxes, AMT, and more.