080 - What Tax Investment Strategies Should I Be Aware of When Selling Stock Options

Real Personal Finance

In this episode of the podcast, we have a listener question:

Just heard your podcast on the target date funds and really appreciate the insight as I'd just rebalanced my 401k and pulled out of them because of the fees and my level of attention to my portfolio. From a financial management perspective, I'm a DIY-er with a blend of Boglehead and FIRE, philosophically. Currently 1/3 of my wealth is concentrated in RSU/stock options from my company as part of my annual compensation package. Is there a tax strategy in regard to timing and/or amount to sell my options to ease the tax burden?What are some options that would make sense to reallocate the funds from the sales? My wife has an annuity in her 403b, which I've heard/read is not a great idea, so can you explain under what circumstances an annuity is or isn't a good option?

Planning Points Discussed

• Tax Planning
• Stock Options
• Annuities
• Restricted Stock Units (RSU)
• Other issues (IRAs, Vesting Schedules, Financial Goals)

Timestamps:

3:45 - Restricted Stock Units

4:19 - Tax Planning of Stock Options

10:00 - Vesting of RSU

16:06 - Deciding When Best To Sell For Your Goals

20:15 - Why Should I Invest In An Annuity?

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