Bonus season often brings a mix of pride and pressure. You’ve worked hard, the company recognizes it—and suddenly your compensation is more complex than it’s ever been.
Here’s a scenario we see frequently:
Jordan (49) reached out after receiving a year-end bonus and a new restricted stock unit (RSU) award.
“Honestly, I’m excited,” Jordan said. “But I’m also overwhelmed. Coworkers keep telling me totally different things—sell right away, hold forever, wait for a lower tax rate. I don’t want to create a tax problem or miss an opportunity.”
Step 1: Slow down and clarify what triggers taxes
The first thing we did was create a simple timeline: grant date, vesting dates, and what Jordan could actually control.
A key point that immediately reduced stress: in many cases, RSUs are taxed when they vest (when the shares are delivered), not when the award is granted. That led to a practical question: What will vesting do to Jordan’s total income this year—especially landing in the same year as a bonus?
We coordinated with Jordan’s tax professional to review how RSU income and bonus income might affect withholding and potential estimated tax needs. (Tax rules are complex and depend on your situation, so personalized guidance from a qualified professional matters.)
Step 2: Address the “hidden” risk—concentration
Jordan already had a lot tied to the employer: paycheck, benefits, and career growth. Holding a large amount of company stock after RSUs vest can quietly increase concentration risk.
We talked through a grounding question:
“If your company gave you the same value in cash instead of stock, would you choose to buy this much company stock today?”
That helped Jordan evaluate the decision more clearly—without emotion or office chatter driving it.
Step 3: Create a timing plan that fits real life
Rather than trying to “perfectly” time the market, we built a straightforward approach Jordan could follow during a busy work year:
- Set a default action at vesting (for example, selling a portion of shares once they vest to reduce concentration and create liquidity)
- Assign purpose to the proceeds: bolster cash reserves, fund upcoming goals, and support long-term investment allocation
- Add a mid-year checkpoint to revisit withholding, expected vesting, and any changes in income
Jordan’s reaction was exactly what we hope for:
“I’m not guessing anymore,” Jordan said. “I have a plan that matches my goals—and it feels manageable.”
If you’re navigating RSUs during bonus season, thoughtful planning around taxes, timing, and diversification can turn complexity into confidence—one decision at a time.