Hodl til the end of time and diversify elsewhere. It's a gamble, but if you sold TSLA or FB stocks right after they vested, you'd be kicking yourself now.
Ask HN: What do you do with vested RSUs?
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Re: Ask HN: What do you do with vested RSUs?
#12Personally I have not sold all of it, but that is not the financial advice I will give. It served me well till the stocks crashed. A way to think about it is if you had the equivalent in cash, would you spend that money to purchase that stock? If yes, then keep the RSU otherwise sell enough for your risk tolerance.
Personally, we have decided to not let our RSUs exceed 10% of our total investment portfolio. That may be too risky for some and too conservative for others.
Re: Ask HN: What do you do with vested RSUs?
#13I already have a diversified stock portfolio, so I'm happy keeping my RSUs as a leveraged bet on my employer. I got one piece of advice recently, which was to sell enough of the vest to cover the tax that it will incur - since RSU tax is incurred at the point of vest in my tax jurisdiction. YMMV on that depending on where in the world you are.
Re: Ask HN: What do you do with vested RSUs?
#14Agree with other comments to sell immediately upon vesting. Learned this the hard way a while back when I held onto my vested RSUs for 1y to reduce the tax burden. Per-share value dropped below the tax % difference, and I was not diversified enough for risk.
As I also recall, holding them complicated my taxes that year and put me into AMT threshold. This may have been from option exercise though, I can’t remember.
Re: Ask HN: What do you do with vested RSUs?
#15Agree with other comments to sell immediately upon vesting. Learned this the hard way a while back when I held onto my vested RSUs for 1y to reduce the tax burden. Per-share value dropped below the tax % difference, and I was not diversified enough for risk. As I also recall, holding them complicated my taxes that year and put me into AMT threshold. This may have been from option exercise though, I can’t remember.
> to reduce the tax burden
If you were allowed to sell on the vesting day (open trading window etc) there is generally no way to reduce any tax burden, you are taxed as regular income on the vesting day based on the vesting price, no amount of waiting will reduce your tax liability.
Re: Ask HN: What do you do with vested RSUs?
#16Agree with other comments to sell immediately upon vesting. Learned this the hard way a while back when I held onto my vested RSUs for 1y to reduce the tax burden. Per-share value dropped below the tax % difference, and I was not diversified enough for risk. As I also recall, holding them complicated my taxes that year and put me into AMT threshold. This may have been from option exercise though, I can’t remember.
> to reduce the tax burden If you were allowed to sell on the vesting day (open trading window etc) there is generally no way to reduce any tax burden, you are taxed as regular income on the vesting day based on the vesting price, no amount of waiting will reduce your tax liability.
That’s not true if you’re getting the RSU at a discounted stare price. Waiting changes it from income tax to capital gains tax.
Re: Ask HN: What do you do with vested RSUs?
#17Hodl til the end of time and diversify elsewhere. It's a gamble, but if you sold TSLA or FB stocks right after they vested, you'd be kicking yourself now.
When is this hypothetical vest? If you got them at the end of 2021 or Q1 this year you'd be up compared to today.
Re: Ask HN: What do you do with vested RSUs?
#18Earlier quoted context omitted.
> to reduce the tax burden If you were allowed to sell on the vesting day (open trading window etc) there is generally no way to reduce any tax burden, you are taxed as regular income on the vesting day based on the vesting price, no amount of waiting will reduce your tax liability.
That’s not true if you’re getting the RSU at a discounted stare price. Waiting changes it from income tax to capital gains tax.
I do not follow and would love a link for my education.
Nearly all the RSU cases I’ve always seen are super simple: on date X, a given amount of shares will be given to you via vesting. You take whatever those shares are worth on that day, and pay regular tax. If you decide to hold past the vesting day, you’ll be subject to additional tax liability if the share price increases, but this additional liability will be $0 if you sell on vest day. It’s completely equivalent to getting just a variable W2 income.
In this simple framework, I’m confused as to what “discounted share price” even means. Certainly for all FAANG and big public companies it works like this.
Re: Ask HN: What do you do with vested RSUs?
#19Think of it as cash. If you received $1K of vested RSUs, you have the exact same scenario of getting $1K cash. Would you buy the company stock? If so, keep the RSUs. Would you buy some other company stock, a new phone, whatever? If so, sell the RSUs and put the money to other use. The only other consideration is that if you choose to keep the RSUs, the additional wrinkle is that the stock is typically not fully liqui…
Fair, but this doesn’t take into consideration the biggest financial impact for these income levels - taxes.
Re: Ask HN: What do you do with vested RSUs?
#20Think of it as cash. If you received $1K of vested RSUs, you have the exact same scenario of getting $1K cash. Would you buy the company stock? If so, keep the RSUs. Would you buy some other company stock, a new phone, whatever? If so, sell the RSUs and put the money to other use. The only other consideration is that if you choose to keep the RSUs, the additional wrinkle is that the stock is typically not fully liqui…
Fair, but this doesn’t take into consideration the biggest financial impact for these income levels - taxes.
What tax implications would impact here? RSUs get taxed as income when they vest.