The Complete Guide to Restricted Stock Units (RSUs)


Are RSUs part of your compensation package or are you looking at a position that offers RSUs?  RSUs can become a significant part of your net worth over time. It’s important that you understand how they work, how they are taxed, and how to manage your RSU compensation. This guide will tell you everything that you need to know about Restricted Stock Units (RSUs). 

What are restricted stock units, or RSUs?

RSUs are a form of compensation offered by a firm to an employee in the form of company shares. RSUs are generally subject to a vesting schedule, meaning the stock does not fully belong to the employee until such a time it is vested. During the vesting period, the stock cannot be sold. Once vested, the stock is given a Fair Market Value and is considered taxable compensation to the employee. Once vested, the employee can sell any shares they own. 

Examples of companies that offer RSUs as part of employee compensation are Adobe, Akamai, Facebook, Google, and Logitech.

How does an RSU work?

An RSU is offered to an employee, generally as an incentive to stay with the company and help the company perform better. If the company does well, the stock price will increase, which helps the employee’s RSUs increase in value. It’s a win-win. 

The company generally releases a set number of the company stock to the employee on a vesting schedule. Here is an example:

John gets an offer of employment from a company who offers him a salary, benefits, and 1000 RSUs. The company will release 200 shares per year for 5 years to John. As these shares vest each year, the Fair Market Value of the shares at the time of vesting is added to John’s taxable income for that year. John pays ordinary income tax on that value.

As they vest, John can choose to sell his shares, keep his shares, or sell some and keep some. They become like any other stock someone would own. If the shares increase in value after they vest, and then John sells the shares, he will pay capital gains tax on the difference between the Fair Market Value in the year of vesting and the sale price.

Why do companies give restricted stock units? 

RSUs are a compensation and retention tool for employers. The benefits of a company issuing these is that employees who have shares in the company they work for are more likely to perform in a way that would help the company grow and do better, and in turn that would make their shares do better.

RSUs also serve as a retention tool because if an employee has unvested shares, they’re more likely to stay with the company until the shares vest and the money becomes theirs. If they leave before their shares vest, the company gets to take them back. Another benefit for the company is that the vesting schedule allows the company to dole shares out much more slowly to avoid diluting their shares.

Restricted Stock Unit

What are the advantages of restricted stock units?

The advantages of a restricted stock unit is that the employee gets to share in the growth of the company they spend their time working for. As the shares vest, the employee can then either keep them or sell them. If the employee sells the shares, they can either use that cash for something now, or reinvest in other investments to diversify their portfolio.

 RSUs also allow the employee to feel that they are more a part of a company that they work for because they own a part of the company in the form of shares.

Another benefit of restricted stock units as a compensation tool is that it is quite simple. Once the shares vest, and aren’t in a black out period for selling them, the employee can sell them at any point. Taxes are much more simple than stock options with restricted stock units as well.

(Don’t forget to download the ‘What Issues Should I Consider Regarding My Restricted Stock Units?’  guide if you haven’t already).


What are the disadvantages of restricted stock units? 

One disadvantage of having RSUs as a form of compensation is that the money is not yours until the shares vest. If you leave the company or are fired before your shares are fully vested, then those shares go back to the company. You can’t count on the money in the RSU account until it is vested.

Another disadvantage is that your shares are a risk for the company doing well or not. If the company does not do well, the shares can drop in value. As long as the shares are not vested, they are an unfunded promise to pay at the share price the stick is at when it vests.

 The other disadvantage to RSU compensation is the taxation. RSUs are taxed as ordinary income as they vest, and the employee has no ability to time their taxes as they would with stock options.

Can I negotiate an RSU?

If the company you work for, or are considering working for, can be bought or sold in the stock market (search for your company here if you aren’t sure), they could offer RSUs. Not all companies offer this. RSUs are more common in tech companies. If your company does have an RSU plan for their employees, you certainly can negotiate this as part of your compensation. If the employer can’t offer you more salary, an RSU might be a good addition to your compensation package instead.  

>> Seeking guidance on RSUs? Our experienced team have helped numerous professionals with RSUs. Schedule a complimentary discovery call today to tap into our expertise and navigate your RSU-related questions with confidence.

Taxation of Restricted Stock Units

Like any other form of compensation, the IRS wants its fair share of your income.  Restricted Stock Units (RSUs) are taxed differently than other forms of equity comp, such as Stock Options and Employer Stock Purchase Plans (ESPP).

At the time you are offered an RSU plan (called a Grant), there is no taxable event. Until you have control of the RSUs in the form of shares of the company, you do not need to pay taxes on them. 

The IRS wants taxes when the compensation becomes recognized or is no longer able to be taken back by the company. Once you have shares in an RSU that vest (becomes yours), the company can no longer take them back, and you must pay ordinary income taxes on the fair market value of the shares when they vest. This is the case even if you do not sell the shares of the stock that you now own. 

Most of the time, the company will withhold the appropriate state and federal income taxes when the RSUs vest. Ensure you check this withholding so you don’t get hit with a surprise tax bill come tax season. 

Are restricted stock units taxable?

Yes, RSUs are a form of income and are subject to federal income tax.

How are RSUs taxed?

Upon vesting, the amount is considered as ordinary income. 

  • If you sell your shares immediately, there is no capital gain tax, and you only pay ordinary income taxes.

  • If you hold the shares beyond the vesting date, any gain (or loss) is taxed as a capital gain (or loss).

An RSU taxation example:

Jamie has 2,000 shares that vest in July.
On the vesting date, the company stock is trading at $8/share. If she holds the shares this becomes Jamie’s cost basis.
Jamie will owe ordinary income taxes on $16,000 of RSU income for that year (2,000 shares vested x $8/share).
If she holds her stock for 3 more years and then sells it for $25/share, she will have a $34,000 capital gain ($25 – $8 x 2,000 shares).

RSU tax calculator

Now that you understand how RSUs are taxed, it’s time to calculate your taxes.  We have created a free Excel tool to help you with the RSU tax calculation. Simply enter your inputs and it will calculate your RSU tax bill. It will also determine if you are under-withheld, and show you how much you may still owe.

👉 Get your free RSU Tax Calculator here.

What is the tax rate for an RSU?

The taxation of RSUs involves ordinary income tax and, potentially, capital gains tax. When you become vested in your stock, its fair market value gets taxed at the same rate as your ordinary income. The exact tax rate will depend on your specific tax bracket

If you sell the shares within one year of the vesting date, the gain is considered short-term capital gain and is taxed at your ordinary income tax rates. If you sell the shares after holding them for more than one year, the gain is considered long-term capital gain, and the tax rate is generally lower than the short-term capital gains rate.

What are the four types of taxes you will owe on your vested RSU stock (ordinary income tax)?

  1. Federal income tax

  2. State income tax (if your state has income tax)

  3. Social Security Tax

  4. Medicare Tax

What happens when you sell the shares of your stock?

You likely already paid income tax on the fair market value of the shares when they vested. So that portion of the stock will not be taxed again.

Do you pay taxes on the growth? 

If there is growth of the stock from the time you got the vested shares to the time you sell, you will pay capital gains taxes on that growth. Capital gains taxes come in two forms: Long Term Capital Gains (LTCG) and Short Term Capital Gains (STCG). LTCG are taxes on stock you sell after owning it for 365 days or more. STCG are taxes you pay on stock you sell that you have owned for less than 365 days. Long-term capital gains tax rates are lower than STCG.

Is my RSU money taxed twice?

No, RSUs are not taxed twice. They are subject to taxation at vesting (ordinary income tax) and potentially at the sale of shares (capital gains tax). While there are two separate tax events, it’s not a case of double taxation on the same income. 

However, it’s crucial to understand the different stages at which taxation occurs to avoid any misconceptions:

  1. Vesting and income tax:
    When RSUs vest, the fair market value of the vested shares is considered ordinary income, and you are required to report this income on your tax return. This income is subject to federal and, if applicable, state income taxes. This is the first instance of taxation.

  2. Sale of RSU shares and capital gains tax:
    If you later sell the RSU shares, any gain or loss from the sale is treated as a capital gain or loss. This is a separate tax event from the initial vesting and is subject to capital gains tax. If you sell the shares for a profit, you’ll pay capital gains tax; if you sell them at a loss, you may be able to use that loss to offset other capital gains or income.

It’s important to note that the capital gains tax is not a direct taxation of the original RSU value. The initial taxation at vesting establishes your cost basis in the shares, and the subsequent sale triggers capital gains tax based on the appreciation or depreciation of the stock value from that cost basis.

Does RSU show up on W2?

RSUs do show up on form W-2. The total value of vested RSUs at the time they vested will show up on your W-2 as taxable wages. You can elect for the employer to withhold taxes from your paycheck when you get RSUs that vest. This way you don’t have to pay estimated taxes every quarter and avoid under-paying taxes and owing a large amount when you file taxes.

My pay stub shows an RSU offset. What is that?

You won’t see an increase in your paycheck when you receive the stock promised by an RSU. The stocks appear in your brokerage account. Therefore, an RSU offset is a way to denote the value of the stocks you receive without adding cash to the bottom line of your check.

How are taxes withheld with RSUs?

Some companies will withhold enough RSU shares upon vesting, to help cover your federal income tax obligation. In this case, your employer will deduct the number of shares needed to cover the tax withholding and deposit the remaining net shares in your account. 

Other companies will deduct your estimated taxes owed out of your paycheck. Some will allow you to choose how you pay your tax on vested RSUs by paying them either out of your paycheck, directly to the IRS, or with vested shares. Other companies don’t give you a choice on how they withhold taxes.

It is best to check with your particular plan to see how taxes are withheld. The amount withheld depends on your personal tax withholding status and estimated tax liability.

Below is an example of how the restricted stock units tax withholdings might work:

# RSU shares vested

RSU stock price 

Income Received/Taxable Amount

Sample Tax Withholding Rate

Taxes Due

Shares Withheld to Pay Taxes

Net Shares Deposited to Your Brokerage Account



$5,000 (100x$50)



($5,000 x .35)





Could the income from RSUs be subject to the Net Investment Income Tax (NIIT

Yes, the income from RSUs could potentially be subject to the Net Investment Income Tax (NIIT). The NIIT is a 3.8% tax that applies to certain types of investment income for individuals, estates, and trusts whose income exceeds specific thresholds.

Is there a risk of triggering the Alternative Minimum Tax (AMT) with RSU income?

Yes, there is a potential risk of triggering the Alternative Minimum Tax (AMT) with RSU income. When RSUs vest, the spread between the fair market value of the shares on the vesting date and the price you paid (which is typically zero for RSUs) is considered income for AMT purposes. The AMT is a separate tax system designed to ensure that individuals with certain types of income, deductions, and credits pay a minimum amount of tax.

Could the income from vested RSUs push me into a higher tax bracket?

The income from vested RSUs could potentially push you into a higher tax bracket. When RSUs vest, the fair market value of the vested shares is considered ordinary income, and this income is added to your total taxable income for the year.

If the additional income from vested RSUs is substantial, it could move you into a higher tax bracket. It’s important to consider the potential impact on your overall tax liability and take this into account when making financial decisions related to your RSUs.

Should I sell my RSUs at a loss? 

It depends. Do you need the money right away? Is the RSU stock selling at a discount, compared to its fair market value? Do you have capital gains that you want to offset? 

The more important question is, what is your RSU stock strategy? When do you keep and sell your stock? You have to create a sound strategy first, and then implement it. At District Capital, creating a sound RSU stock strategy is one of the things we help our clients with.

How are RSUs taxed at the state level? Are there any specific state tax considerations I should be aware of?

When you get your actual RSU stock (or when it vests), that is considered ordinary income, just like your salary. So you are subject to federal taxes. If you live in a state that has a state income tax, then you would also be subject to state income tax.

Are there any strategies I can use to minimize the tax impact of RSUs? 

1) Maximize tax-deferred contributions. If you are eligible and contribute to tax-deductible accounts like a pre-tax 401(k), flexible spending account, or health savings account, then these can lower your overall tax burden. 

2) Deduction Bunching. This is a tax strategy where you give your charitable donations for two years into a single year to maximize your itemized deduction for the year you make your donations.

3) Donor-Advised Funds (DAF). This is one way to execute deduction bunching. A donation to a donor-advised fund is tax-deductible. But you can give grants to charities at any point in time. This allows you to maximize your deductions while giving you time to think about which charities to donate the money to.

4) Defer Taxes by Hedging With Options. If you want to lock in your RSU stock profit now, but want to realize capital gains until the next year when your tax bracket might be lower, buying a put option can help you do that. If you buy a put option on your RSU stock and the stock goes down, the value of your put option rises, offsetting any losses on your RSU stock holdings.


What is a wash sale?

A wash sale occurs when you sell or trade a security at a loss and, within a specific period, you buy a “substantially identical” security or acquire a contract or option to do so. The wash sale rule is designed to prevent individuals from claiming a tax loss while still maintaining a position in the same or substantially identical security. The wash sale period typically extends for 30 days before and after the sale.

Can selling my RSUs trigger a wash sale?

If you sell your RSUs at a loss and then exercise options to buy shares within 30 days of the sale, you will be subject to the wash sale rule.

How do I avoid a wash sale with RSU vesting?

When selling RSUs at a loss, pay attention to the timing of your transactions to avoid a wash sale. It’s easiest to avoid a wash sale by doing nothing within 30 days after the asset is sold. For example, if you wait 31 days to repurchase an asset, the rule doesn’t apply. You can then deduct the loss and take advantage of your capital gains.

What can I do if a wash sale occurs?

If a wash sale occurs, you may want to increase the holding period of the newly acquired stock. This will allow the disallowed loss to be added to the basis of the new security. This may lessen the tax impact when you sell the new shares. It’s always a good idea to consult with a tax professional or a fee-only financial advisor to get advice specific to your situation.

RSU Vesting Period

The period between the grant date and the vesting date is known as the vesting period.

  • Do RSUs have a vesting period?

Depending on your contract, RSUs can vest every month, quarter, or year. This schedule will vary depending on the company and can be over a period of many years. 

Usually, a company will release a set number of shares over the specified vesting schedule. This allows the company to control how much stock is on the marketplace and is available to be sold. It also allows the employee to pay taxes on the shares over time rather than all in one tax year. 

  • Can vested RSUs be taken away?

Vesting means you own the shares. In general, your company cannot take back shares that have vested even if you leave the company.

RSU Vesting Schedule

RSUs are almost always subject to a vesting schedule. 

  • What is a vesting schedule?

Vesting schedules are incentive programs set up by employers to give employees access to unvested shares or funds. Employers use these incentives to reward employees who remain with them for a long time. 

  • What are the 3 types of vesting schedules? 

1. Graded vesting: this is when you receive shares over a regular period until you receive all of the shares. For example:
In 2024, your employer grants you 1,000 RSUs, and it will vest 25% annually.
250 shares vested in 2025
250 shares vested in 2026
250 shares vested in 2027
250 shares vested in 2028

2. Cliff vesting:  after a certain amount of time has passed, employees earn a certain percentage. For example:  
In 2024, your employer grants you 1,000 RSUs and it will vest in 3 years.
0 share vest in 2025
0 share vest in 2026
1,000 shares vest in 2027

3. Hybrid vesting: this is a combination of both of the above. Employers are only eligible for stock options after a certain amount of time has passed and after attaining a certain objective. For example: 
In 2024, your employer grants you 1,000 RSUS. It will vest in a year at 25% in year 1, 50% in year 2, and 25% in year 3.
250 shares will vest in 2025
500 shares will vest in 2026
200 shares will vest in 2027

It is often best to speak to a financial advisor before making any major moves like selling RSUs. You don’t want to get hit with a surprise tax bill, or sell stock that you would have been better keeping. A professional can help you determine the right move for your situation.

Stock Options vs RSUs

RSUs and stock options are both forms of employee equity compensation offered to an employee by a company. When you are considering your compensation, you should look beyond your paycheck to see if you are offered RSUs or stock options. Some companies offer the choice of selecting between stock options or RSUs or a 50/50 mixture of both. Understanding the differences between stock options vs RSUs will help you make an informed decision about which equity compensation is best for you and adjust your financial plans accordingly.

What are stock options?

Stock options are the most well-known form of equity compensation. Stock options offer you the right to buy company stock at a certain price (the exercise price). However, there is no obligation to do so. It’s important to know when the options expire, which is usually 10 years. After the expiration date, you can no longer buy the company stock. You would only exercise the stock options if the exercise price is below the market price, otherwise it wouldn’t be worth it.  

Employee stock options are more complicated than RSUs. You need to understand what type you have, and then plan which actions you should take from there. There are two types of stock options. These are non-qualified stock options and incentive stock options. NSOs are stock options that do not qualify for special tax treatment and ISOs are stock options that do qualify for special tax treatment.

Advantages of stock options

– Offers employees an opportunity to have ownership in the company that they work for, which can lead to increased motivation, productivity, and loyalty.
– If the business is successful, then employees can potentially make a lot more money than just their salary.
– They offer some tax benefits.

Disadvantages of stock options

– They can be risky and employees could potentially not make any money.
– If employees don’t make any additional money then they may feel less satisfied.

Stock Options

What are the key differences between stock options and RSUs?

There are several differences between stock options and RSUs that are important to take into consideration. One is not necessarily better than the other, but be aware of the differences so you can make a decision on whether stock options or RSUs are best for you.


Taxes are one of the most important things to consider when you are deciding between stock options and RSUs. 

When RSUs are first granted but still restricted, then no income tax is due. As soon as they vest, then it is counted as earned income and will be subject to income tax. The taxable income is equal to the market value of the shares at this time.  Income tax can be as high as 48% (Federal and State) depending on the value of your RSUs and the state in which you live. It’s important to note that it’s not uncommon for an employee’s regular income plus the value of the RSUs to push them into a higher tax bracket. 

An exception to the above is filing an IRS 83(i) election to get a 5-year deferral. Ordinary income tax will still be due on the RSU value but additional increases in value will be subject to capital gains tax instead.

Taxes for stock options are quite different. Options are not taxed until they are exercised. The ability to pick and choose when you want to exercise your stock options gives you additional flexibility for tax planning purposes. If you hold onto stock options for at least one year, they will be taxed at more favorable capital gains tax rates. Stock options are usually exercised after a company goes public. Once this happens then the employee can sell enough shares to cover the tax owed on the appreciation.

Non-qualified stock options (NSOs) and incentive stock options (ISOs) are taxed differently. For NSOs, you are taxed on the difference between the market price and the grant price upon exercise of the stock option. This is taxed as regular income so it’s subject to income tax and payroll taxes. For ISOs, no taxes are due upon exercise but the spread is subject to alternative minimum tax.


Stock options vs RSU risk

It is important to think about how the company might perform in the future. Stock options require an increase in a company’s stock price to have value and RSUs do not. 

With stock options, if the stock price falls or stays the same as the price that the options were when they were granted, then the stock option is worth nothing. The higher the stock price is above the grant price, the greater your return will be. Stock options are a risker option than RSUs but they can deliver greater returns. 

RSUs carry less risk than stock options. They will always have value as long as the company’s stock price is above $0. The value is fixed at the stock price at vesting.

If you have to choose, you’ll have to weigh the relative safety of RSUs with stock options’ greater risk and potential returns. 


Vesting period

The vesting period is the amount of time before the RSUs or stock options are unconditionally owned by the employee. RSUs can vest every month, quarter or year and be over a period of many years. Stock options typically vest over three, four or five years.

There is a difference between what happens with stock options and RSUs once the vesting period is over. If you have stock options then once the vesting date arrives, you still have to decide whether to exercise the option to buy the company stock. When an RSU vests, the company stock is immediately owned by the employee.


(Don’t forget to download the ‘What Issues Should I Consider Regarding My Restricted Stock Units?’  guide if you haven’t already).


Are stock options or RSUs better?

There are advantages and disadvantages to both stock options and RSUs. Stock options are generally better if the company is in its early stages and RSUs are generally better for a later stage company.  

Although stock options can be a great perk, make sure that they aren’t your only financial plan. If something happens to the company then you could lose your entire investment. RSUs provide protection that doesn’t exist with stock options so you may want to think about how much risk you are willing to take. When deciding between stock options vs RSUs, or choosing both, the choice will vary from person to person.

Below are two hypothetical client scenarios to illustrate when stock options or RSUs may be the best option.

David is 58 and is getting ready to retire next year. David can choose between stock options and RSUs at the company he works for. If he retires with unvested RSUs then he will lose them. This means that he can collect the RSUs that vest in year one, but he will lose all of the additional shares in years two, three and beyond. While stock options come with greater risk, they may be a better option for David.

Olivia is 35 and recently completed a bathroom remodel. She took out a $80,000 line of credit to finance the project. She has very little in savings and is relying on her annual bonus to pay this off. RSUs may be a better choice for Olivia because they offer a more planned and predictable source of income which will allow her to pay off her debt.

Stock OptionsRestricted Stock Units (RSUs)
Grant DateDated on issuance

Dated on issuance

TermExpires 10 years from the grant date

No expiration

Exercise PriceSet based on market value

No exercise price
VestingCan be vested anytime for any milestone

Can be vested anytime for any milestone

PaymentStockStock or cash
TaxationNSOs are treated as regular income. ISOs are treated as preferred items for alternative minimum tax

Taxed on vesting and treated as regular income (capital gains if stock is held for more than a year).

Taxation TimingOption income is taxable at exercise

RSU income is taxable at vesting

DividendsNot entitled to receive dividends

Usually none while unvested

Shareholder RightsFull rights only upon exercise
None while unvested

Is it better to take RSU or stock options?

This really depends on the situation. There are pros and cons to both stock options and RSUs. If you need the money more quickly or you know you need cash at some point from this compensation offer,  RSUs will be the way to go because unless the stock falls to nothing, they are guaranteed to produce some income versus stock options, which may or may not be worth anything when the option is there to buy stock.

When looking at taxes, stock options have better tax treatment because you can time the taxes on them. RSUs are always taxed as ordinary income as they vest, and the employee cannot time when that happens.

RSUs are also less risky than stock options. Stock options require an increase in a company’s stock price to have value. With a stock option, if the price of the shares stays at the grant price or even drops in value, your options will be worth nothing. With an RSU, stocks are granted in the form of full shares, so as long as the share is worth more than zero dollars, the employee walks away with something as the shares vest.

What should I do with my restricted stock units?

This depends. If you are vested in the RSUs, that means you own the stock. In general, owning a high concentration of one company in your portfolio puts you at higher risk than a diversified portfolio would. If your RSUs are a large part of your portfolio, selling some to diversify may be a good idea.

Other common RSU questions: 

  • How do I calculate the cost basis for restricted stock units?

The basis of your RSUs should be calculated by the plan that holds the RSUs. For example, if your plan holds the stocks in Fidelity, Fidelity should have your basis information in your account. You’ll be able to see your basis for each share that has vested by looking at your account statements. Your basis is the amount that each share was worth when it vested. 

  • Can you sell RSUs at any time?

In general, you can sell RSUs as soon as they vest. In some circumstances, to avoid insider trading, there is a black out period during which time you cannot sell your shares. There are also open trading periods in which you can sell your shares. You will need to check with your particular company to see if there is a black out period and how long that lasts.

  • Should I sell restricted stock units immediately? 

Due to the way RSUs are taxed, it is generally advantageous to sell your vested shares right away. This is mainly for risk-management purposes. Because you pay income tax on vested shares as they vest, it doesn’t matter if the shares decrease in value, you will have already paid taxes on them, and therefore a decreased value of shares means you paid a much higher percentage of tax on them then had you sold them right away.

Another reason to sell your shares quickly is that it avoids your portfolio from becoming highly saturated in one single company. It’s a good idea to have a diversified portfolio, and RSUs are not diversified because they are shares all owned with one company.

To protect yourself against any major company downturn, as well as having to pay high taxes on shares that have decreased in value, you may want to consider selling some or all of your shares as they vest. There are circumstances in which you might want to keep some shares, but it is best to check with your financial planner to see the right plan for you.

  • Can you lose money with RSU?

You can lose the value of your stocks in your RSUs if the price decreases after your RSUs have vested. Not only are you potentially losing the value of the stock if the price decreases, you’re also losing money on the taxes you paid on the RSUs because you have to pay those regardless of whether the shares lose value.

  • What happens to RSUs when you quit your job?

You lose all your unvested RSU shares when you quit your job. For the vested RSU shares that are already in your brokerage account, you can keep those since it is your money as soon as it vests.

One RSU Strategy

If you just sit back and do nothing and work for a company for a really long time, you might end up accumulating hundreds of thousands of dollars in one company stock. We have client at District Capital – when we met her, she had approximately $800,000 worth of money all in one stock. 

You might be thinking, “Wow, that’s really amazing that she has managed to accumulate that much money over time!” Well, it is amazing, but she was also holding that amount of money all in one stock, which can be extremely risky. You never know what might happen to a company. It might be great now, but what if there’s an accounting scandal in the future? Or what if it goes bankrupt because of the pandemic? Look at General Electric (GE). It was considered a safe stock until it wasn’t. At one point, its value dropped to a fourth of what its value was years ago. 

One way to lower risk is to sell your RSU shares that you receive as soon as they vest. You can then invest them in a diversified basket of stocks or bonds. Diversification is a really key component in investment planning. Now, what you’re probably thinking is “it’s going to be really hard for me to get rid of these Google shares. I’ve only seen them go up over time and I’ve sort of fallen in love with these shares.” But ask yourself this: if you have $50,000 worth of money to invest now, would you place it all in just one stock? If you think of it like that, most people would not put their entire $50,000 all into one stock knowing how risky it is. Keeping your RSUs in one stock is the same concept. 

Get expert advice on your RSUs

Here at District Capital Management, we can help advise you on the best way to manage your RSUs, including a tax-efficient strategy for your RSUs. Feel free to schedule a free discovery call to see how our financial planners can help you today.

Best Financial Planner Washington DC

Alvin Carlos, CFP®, CFA is an investment advisor and fee-only financial planner, in Washington, D.C that works with clients across the country. He has a Master’s degree in International Relations from SAIS-Johns Hopkins. Alvin is a partner of District Capital, a financial planning firm designed to help professionals in their 30s and 40s achieve their financial goals through smart investing, reducing taxes, retirement planning, and maximizing their money. Schedule a free discovery call to learn how we can help elevate your finances.


District Capital is an independent, fee-only financial planning firm. We help professionals and entrepreneurs in their 30s and 40s elevate their finances and maximize their money. We are based in Washington, D.C and we work with people virtually nationwide.

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