A First Premier Bank financial advisor helps tech professionals with stock options, RSUs and ESPP shares decide what to sell, what to hold and when. Each decision gets a due date and a tax cost estimate before anyone acts.
Many of our clients are veterans who moved into tech after service. They hold a military pension and a TSP balance, and now a pile of company stock that has quietly become the biggest thing they own.
Can I sell my RSUs the day they vest?
Usually yes, and for many people it's the simplest choice. RSUs are taxed as ordinary income when they vest, so selling at once adds no extra gain; you've already paid tax on that value through withholding, at least in part.
Withholding is often the catch. Employers commonly withhold at a flat supplemental rate that can fall short if you're in a high bracket (the top federal rate is 37% above $640,600 single or $768,700 married filing jointly, tax year 2026). Check your year-end W-2 and the vesting confirmations before April, not after.
Options, ESPP shares and the tax cost of each
Each equity type has its own trigger. Nonqualified options create ordinary income when you exercise. Incentive options can trigger the alternative minimum tax. ESPP shares depend on how long you hold them after purchase.
Before First Premier Bank suggests exercising anything, it estimates the tax cost of the exercise for the year and compares it with doing half now and half next year. Spreading an exercise across two tax years can keep you out of a higher bracket.
- Nonqualified options: income is taxed at exercise on the gap between price and strike.
- Incentive options: the exercise can add to alternative minimum tax even with no sale.
- ESPP: selling early or late changes how much of the discount is ordinary income.
How much company stock is too much?
If more than a fifth of your net worth sits in one company's stock, diversifying usually comes before anything else. Your paycheck, bonus and unvested grants already depend on the same employer.
Take a hypothetical engineer with $1.5M total: $450K in company stock, $700K in the TSP and IRAs, $350K in cash and a home. Company stock is 30% of the total. Selling $150K brings it to $300K, or 20%. If the shares have a $50K basis, the gain on that sale is taxed, and we work out that cost first. Every investment carries the risk of loss, including company stock, so selling some isn't a bet against your employer.
| Item | Before | After |
|---|---|---|
| Company stock | $450K | $300K |
| Share of net worth | 30% | 20% |
| Other investments and cash | $1.05M | $1.2M |
Is a mega-backdoor Roth worth it for me?
It can be, but only if your plan allows after-tax contributions and in-plan conversions or rollovers. The total defined contribution limit is $72,000 for 2026, including your own deferral of up to $24,500 and the employer match.
Ask your plan administrator whether after-tax contributions are allowed. If so, the room is the $72,000 total minus your deferral and the match. Fund it only after the cash cushion and the stock sales above are handled.
Planning around an IPO or acquisition
A liquidity event brings a short list of due dates: lockup end, option exercise windows, estimated tax payments. We put them in order and write them in your roadmap.
Some of our clients also have a TSP balance or a military pension. Our TSP to IRA rollover, Military retirement planning and Tax planning for veterans work can sit beside the equity decisions. Meetings happen by video and phone, so location doesn't matter; the minimum is $500K in investable assets.
Frequently asked questions about First Premier Bank
Do I owe tax when RSUs vest if I keep the shares?
Should I exercise all my stock options in one year?
Can a financial advisor help if my stock is still unvested?
Who We Help
This is general information and education, not individual investment, tax, or legal advice. Investing involves risk, including loss of principal. Before making any financial decision, talk to a qualified professional about your specific circumstances.