Working at Amazon, Microsoft, Google, or a funded Seattle-area startup means a meaningful share of your total compensation arrives as equity, and every vesting event carries both a decision and a tax consequence. At A5 Financial, RSU and equity compensation planning is a core specialty.
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Most financial advisors treat stock grants as a line item. We treat them as a planning event. Here is what we address with every equity compensation client:
Amazon's back-loaded vesting schedule — 5% year one, 15% year two, 40% year three, 40% year four — means many employees spend years in a relatively low-equity phase before a significant income spike arrives. We plan for that inflection point in advance.
Microsoft's ESPP offers a 10% purchase discount with a six-month offering period. Google's total compensation packages often combine RSUs with performance bonuses in ways that compress income into specific years.
Early exercise elections, 83(b) filing windows, and what to do with ISO grants when a liquidity event may be years away — we model the scenarios based on your current tax position and retirement timeline.
At A5, we build a multi-year tax map that aligns your vesting events, exercise windows, and RSU sales with your retirement income strategy, Roth conversion opportunities, and investment allocation. Stock proceeds are intentionally integrated into the income ladder we build for retirement — not treated as a windfall to figure out after the fact.
RSUs are grants of actual shares that vest over time and are taxed as ordinary income when they vest. Stock options give you the right to purchase shares at a set price, and the tax treatment depends on whether they are ISOs or NSOs, when you exercise, and how long you hold the shares.
When RSUs vest, your employer withholds taxes at the IRS supplemental flat rate of 22%. If your total compensation puts you in the 32–37% marginal bracket, that gap doesn't get corrected until you file — and it can add up to thousands of dollars owed.
Roth IRA contributions phase out at higher income levels. However, a backdoor Roth IRA conversion is available regardless of income, and your workplace Roth 401(k) has no income restrictions at all.
There is no single right answer, but concentrated exposure to a single employer carries real risk that many people underestimate. We help you build a disciplined diversification plan that balances tax efficiency with reducing concentration risk.
Vesting events are planning opportunities, not just income events. We build a multi-year tax map that aligns your RSU sales, exercise windows, and ESPP proceeds with your retirement income timeline, Roth conversion strategy, and investment allocation.
We get it, new questions come up all the time. So, send us a message whenever it works best for you. We’ll get back to you and help chart your course toward a fulfilling future.
