You have been paying Social Security taxes for your entire working life, including those on the income you from nonqualified stock options (NQSOs) or restricted stock/RSUs. As you near retirement age, there are planning ideas with stock compensation you should know about as you make decisions on Social Security benefits. This article provides the core knowledge to inform those decisions.
Among the many ways to amass the wealth you need to fund the retirement you want, your stock compensation can play a major role. As this article explains, if you combine equity grants with other assets such as a 401(k), retail investment accounts, Social Security, and other savings or benefits, you could find yourself with enough money to fully fund your ideal retirement.
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Stock compensation can help you save for retirement. Understand the issues and explore strategies that can help your retirement funding.
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.
When you retire, 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.
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.
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.
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.
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.
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.
The five years before and after retirement are the "critical zone" for financial planning, including that related to your stock options.