Owning Company Stock in your 401(k)

 

Owning company stock in your 401k can elicit strong reactions. Whether you are for and against the idea, I suspect you believe you are right. You might be, but you might not be.

There is no right answer, so listen to this episode to learn about the pros and cons of doing so.

I field my first listener question about the Default option. There is a second question about setting up an allocation without touching it. It is great to know people are listening and asking questions.

I will touch on Net Unrealized Appreciation or NUA on the company stock topic. If you don’t know that, be sure to listen, it can save you money! Converting Ordinary Income into long Term Capital gains. NUA lowers your future Required Minimum Distributions or RMDs. You have to do a few things and a tax cost upfront. In the right situation, it is worth it.

I’ll share a story of an unhappy person who got prudent financial advice. They didn’t like the outcome, but the advice is what you should have done. Finally, I will remind you of the power of the self-directed investment option in the 401k, BrokerageLink.