If you've built wealth through Restricted Stock Units (RSUs), one of the biggest retirement questions becomes: Should I keep holding my company stock or diversify?

For many professionals in the Silicon Valley, RSUs represent years of hard work and can make up a significant portion of their net worth.

While that equity can be an incredible wealth-building tool, retirement introduces a new goal: turning concentrated wealth into lasting financial security.

The decisions you make about your RSUs today can affect your investment risk, taxes, retirement income, and legacy for years to come.

Quick Answer: What Should You Do With RSUs Before Retirement?

There's no one-size-fits-all answer, but we recommend reviewing your RSUs with these questions in mind:

• Are too many of my investments tied to one company? 
• How much company stock should I own? 
• Should I sell RSUs as they vest? 
• How can I diversify without creating an unnecessary tax bill? 
• How will these decisions affect my retirement income? 

A thoughtful strategy balances investment risk, taxes, and your long-term retirement goals, not just today's stock price.

Why RSUs Become More Important as Retirement Approaches

During your career, your salary, bonuses, and future earning potential are connected to your employer.

When a large portion of your investments are also invested in that same company, your financial future becomes increasingly concentrated.

This is known as concentration risk.

If your employer experiences a significant decline, multiple parts of your financial life could be affected simultaneously.

That's why many pre-retirees begin asking:

"How much company stock is too much?"

Frequently Asked Questions About RSUs:

Should I Sell My RSUs as Soon as They Vest?

There isn't a universal answer.

Some people sell vested RSUs immediately because they're already taxed as ordinary income at vesting and prefer to diversify.

Others continue holding shares because they believe in the company's long-term potential.

The better question is often:

If someone handed you cash equal to the value of your vested RSUs today, would you invest all of it back into your employer's stock?

If the answer is no, it may be time to review your allocation.

How Much Company Stock Should I Own?

There's no magic percentage.

Instead, consider:

• Your retirement timeline 
• Other investments you own 
• Your overall risk tolerance 
• Whether your future income also depends on the company 

Many investors gradually reduce concentrated positions over time rather than making one large sale.

Where Should I Invest After Selling RSUs?

Diversification doesn't mean simply selling stock, it means intentionally reallocating assets to support your retirement goals.

Many retirees choose diversified portfolios that may include:

• U.S. stocks 
• International investments 
• Bonds 
• Cash reserves 
• Income-producing investments 
• Tax-efficient investment accounts 

The right mix depends on your retirement timeline and financial objectives.

What Are the Tax Implications of Selling RSUs?

Taxes are one of the biggest concerns surrounding RSUs.

Generally:

• RSUs are taxed as ordinary income when they vest. 
• Additional appreciation after vesting may be taxed as capital gains when shares are sold. 

Questions worth thinking about include:

• Should I spread sales over multiple years? 
• Will selling push me into a higher tax bracket? 
• Should I coordinate RSU sales with Roth conversions? 
• Can charitable giving help offset capital gains? 

These strategies often work best when coordinated with your financial advisor and tax professional.

Best Practices for Managing RSUs Before Retirement

1. Diversify Gradually

Instead of trying to perfectly time the market, many investors diversify over several years.

This can help:

• Reduce concentration risk 
• Manage taxes 
• Create a smoother transition into retirement  

2. Coordinate Your Tax Strategy

Selling company stock shouldn't happen in isolation.

Your strategy may also include:

• Roth conversions 
• Required Minimum Distribution planning 
• Social Security timing 
• Medicare premium planning 
• Charitable giving strategies 

Looking at the complete picture often creates more opportunities than focusing on one decision at a time.

3. Build Retirement Income, Not Just Investment Growth

As retirement approaches, your portfolio has a new job, it's no longer focused solely on growth.

It also needs to support:

• Reliable retirement income 
• Tax efficiency 
• Flexibility during market volatility 
• Long-term financial independence 

Diversifying RSUs can help create a portfolio designed for both growth and income.

4. Review Your Plan Regularly

Technology companies evolve quickly.

So do tax laws, markets, and your retirement goals.

Reviewing your equity compensation strategy annually can help ensure your investments continue supporting the future you're working toward.

Retirement Planning for Tech Employees in Silicon Valley

Professionals throughout San Jose, Palo Alto, Mountain View, Cupertino, Santa Clara, Sunnyvale, Fremont, and the Greater Bay Area often face financial questions that are unique to the technology industry.

These may include:

• Restricted Stock Units (RSUs) 
• Employee Stock Purchase Plans (ESPPs) 
• Stock options 
• Deferred compensation 
• Concentrated stock positions 
• Early retirement planning 

While equity compensation can create significant wealth, it also creates planning opportunities (and risks) that deserve careful consideration.

The True North Perspective

At True North Advisors, we believe retirement planning is about more than maximizing returns, it's about helping you make informed decisions with clarity and confidence.

If your career has helped build significant wealth through company stock, the next step isn't necessarily selling or holding everything, it's understanding how your equity fits into your broader financial picture.

A well-designed retirement strategy considers your investments, taxes, retirement income, legacy goals, and the life you want to build after your career.

Frequently Asked Questions

Should I hold or sell my RSUs before retirement?

It depends on your overall financial picture. Many people choose to diversify gradually to reduce concentration risk while managing taxes strategically.

Are RSUs taxed twice?

No. RSUs are typically taxed as ordinary income when they vest. If the shares increase in value after vesting, only that additional appreciation is generally subject to capital gains tax when sold.

What should I do with money after selling RSUs?

Many investors reinvest the proceeds into a diversified portfolio that aligns with their retirement goals, risk tolerance, income needs, and tax strategy.

Should I diversify my company stock?

If a significant portion of your wealth is invested in one company, diversification may help reduce risk. The right approach depends on your goals and overall financial plan.

Looking for Guidance?

If you're approaching retirement and wondering how your RSUs fit into your long-term financial plan, we're here to help.

At True North Advisors, we work with tech professionals throughout the Greater Bay Area and across the US to simplify complex financial decisions, from equity compensation and tax planning to retirement income and legacy planning.

Schedule a complimentary Retirement Readiness Review and discover how your company stock can become part of a thoughtful, diversified strategy designed around your unique True North.