Do you have too much of your portfolio tied up in your employer’s stock? A concentrated stock position is not defined by one specific number. What matters is whether a decline or prolonged period of underperformance could materially impact your retirement or financial plan.
In this video, Eric Burkholder and Valentin Tranier of Burkholder Wealth Management discuss several strategies for managing concentrated company stock, including:
- Creating a disciplined diversification schedule
- Managing capital gains while reducing risk over time
- Gifting appreciated stock to charities or donor advised funds
- Using covered calls to generate income
- Using collars to help protect against downside risk
- Planning around trading restrictions with a 10b51 plan
- Considering Net Unrealized Appreciation (NUA) for company stock held inside a 401k
- Preparing your portfolio before retirement rather than waiting until your final day of work
There is no single strategy that works for everyone. The right approach depends on your taxes, retirement plan, risk tolerance, cost basis, and overall financial situation.
If you have a concentrated stock position and would like help evaluating your options, Burkholder Wealth Management is happy to help.
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