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Managing equity when transitioning to retirement
Applies to:
You usually have 90 days to exercise after leaving. ISOs may convert to NSOs.
You usually have 90 days to exercise vested options after leaving.
Unvested RSUs are typically forfeited. Vested RSUs are yours to keep.
Performance conditions must be met before vesting. Check pro-rata rules.
Retirement often includes more favorable treatment of equity compensation than a standard departure. Understanding your options helps maximize your equity value.
Extended Exercise Windows: Many plans give retirees longer to exercise options (often 3-5 years instead of 90 days).
Qualification Requirements: Check if you meet the plan's definition of "retirement" (often age + years of service).
ISO Treatment: ISOs may convert to NSOs after a certain period post-retirement.
Unvested RSUs: May vest on a pro-rata basis or accelerate depending on plan terms.
Check Your Plan: Some companies allow continued vesting during retirement.
With extended exercise windows, you can spread option exercises across multiple tax years to manage brackets.
Coordinate equity income with Roth IRA conversion strategies.
Large equity income can increase Medicare premiums (IRMAA).
Going through a major life change? Get personalized help with your equity.
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This content is for educational purposes only and does not constitute financial advice. The information provided is general in nature and may not appl...
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