If you’re retiring or leaving your employer and have accumulated company stock as part of your retirement plan assets,* you have an important decision to make.
This is even more important if your shares have appreciated significantly in value and represent an important part of your total portfolio. Depending on your personal situation, there may be favorable tax consequences if you move the company stock to a taxable account.
Example: John Smith is 62 years old and about to retire from his employer, ABC Inc. John has retirement plan savings of $3 million that he plans to have paid to him. He holds a significant amount of ABC stock in his 401k plan that has increased in value over the years.
John could have his retirement plan sell the company stock and he could take the proceeds in cash, but John would like to keep the stock because he thinks it will continue to grow.
John has heard that there may be favorable tax consequences depending on if he moves his ABC stock into a taxable account or rolls the stock over into his Rollover IRA when he takes his 401k plan assets.
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Moving Stock To A Taxable Account |
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Moving Stock To A Rollover IRA |
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In the pages that follow, we will show some of the possible consequences of moving the employer stock from your retirement plan into a taxable account or a Rollover IRA.
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