Atlanta Financial Blog

What’s the best way to handle company stock without getting killed by taxes?

Cathy C. Miller, MBA, CFP®, CRPS®, CDFA™
April 25, 2017

Company stock, especially if it was awarded as part of a long term incentive package, can be a terrific way to build wealth. But it can be a double-edged sword, too. Over-concentration in a single stock probably represents one of the biggest mistakes we have seen retirees make. And when the stock is from the company where they built their career, they may have a strong emotional attachment that can cloud judgement.

Such over-reliance and over-confidence can be nearly fatal to your retirement plans and dreams when an investor rides a single stock up, and then back down again (remember Enron and Worldcom?).

I recently had a client with more than 50% of his net worth in his company stock. He understood this risk and wanted to enter retirement without staking his financial future on a single stock. So we put together a three-pronged plan:

  1. We sold some of the stock to create a portfolio that would be more diversified and produce better income. We spread out the sales over a period of time to reduce his taxes.
  2. We used the stock with the lowest cost basis to fund charitable giving. This was important part of the legacy he wanted to leave.
  3. We retained a much smaller, more reasonable number of shares because he believed it might continue to appreciate. But, we agreed to watch it carefully and trigger additional sales if fundamentals changed.

Share This:

Share on facebook
Share on linkedin
Share on twitter
Share on google

Where Does the Travel Industry Stand as Summer 2021 Kicks Off?

The travel industry has begun to see growing demand as we move closer to summer. However, not all travel will be the same, as much of the demand is directly related to the COVID-19 vaccine and reduced CDC restrictions. Instead, industry trends have emerged based on individual comfort levels as they apply to different modes of travel.
Below we will explore some of the factors that have contributed to an increase in travel and how different industries are responding to it.

Read More »

Understanding Inflation in 2021: What Investors Need to Know

Following a year of economic instability, it appears that many of us are turning our attention to something that’s been around for decades, but has recently piqued national interest – inflation. In fact, a recent study found that people are Googling the word “inflation” at a rapid rate, with a peak not seen since 2010…

Read More »

Why Women Need to Plan for Long-Term Care

As mothers, sisters and daughters, women are often counted on to be caregivers for family members in need. Whether it’s something as small as a cold or as debilitating as a terminal illness, women are typically the ones to care for and help out when a loved one is sick. But what happens when the caregiver is in need of her own care? Too many women are stuck facing this dilemma head on, instead of preparing for it while there’s still plenty of options, resources and time ahead. Below are a few reasons why it’s so important for women to plan for their own long-term care strategies now.

Read More »