I saw a lot of posts lately from people who got lucky with Nvidia appreciating mad%, but also, people who got a lot of their employer stock over the course of the career and haven't sold immediately like you're supposed to would be in the same situation: overloaded and with big unrealized gains.
So, suppose you had your FI number, but about 25-50% of it was in a single stock in a brokerage account with a very low cost basis. If you sell, you'll have to report a massive income and get hit with taxes. If it's 50% of your NW and most of it is gains, then paying 20% tax on it would drop your entire NW by 10% overnight.
What would you do?
Sell immediately and eat the hundreds of thousands tax bill to rebalance?
Sell gradually over the years to spread out the capital gains?
Keep it, but account for the extra risk with a lower SWR?
Not care at all?
Personally, I think I'd try to offload it over the years instead of right away. Paying 100K on each million of your FI number sounds way too steep to be worth the reduction in volatility. Assuming an individual SP500 stock would have the same expected return as the whole index, just more volatility. submitted by /u/Automatic_Apricot634
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So, suppose you had your FI number, but about 25-50% of it was in a single stock in a brokerage account with a very low cost basis. If you sell, you'll have to report a massive income and get hit with taxes. If it's 50% of your NW and most of it is gains, then paying 20% tax on it would drop your entire NW by 10% overnight.
What would you do?
Sell immediately and eat the hundreds of thousands tax bill to rebalance?
Sell gradually over the years to spread out the capital gains?
Keep it, but account for the extra risk with a lower SWR?
Not care at all?
Personally, I think I'd try to offload it over the years instead of right away. Paying 100K on each million of your FI number sounds way too steep to be worth the reduction in volatility. Assuming an individual SP500 stock would have the same expected return as the whole index, just more volatility. submitted by /u/Automatic_Apricot634
[link] [comments]
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