Hi, I’m Tim Bonner with Totus Wealth Management.
If your retirement savings are heavily tied to a single company’s stock, whether that’s your employer or another company, you’re not alone. But here’s the truth: A concentrated stock position can be both your greatest opportunity… and your biggest risk.
Let’s say you’ve worked at a successful company for 20 or 30 years. You’ve earned stock as compensation or bought shares at a discount. Perhaps the stock has performed incredibly well. But here's the problem — you’re now betting your retirement on the future of one company.
Even companies that seemed untouchable can face scandals, regulatory issues, or sudden market shifts. And when that stock drops, your lifestyle, security, and retirement timeline can go with it.
At Totus, we help clients unwind concentrated positions thoughtfully–before they retire.
Why before?
Because once you’re no longer working, you may not have time to recover from a sudden loss.
We combine a few different approaches to help our clients avoid overconcentration. Instead of selling a large block of stock at once, we stagger sales over time to reduce tax exposure. However, the actual tax benefit depends on your individual circumstances, tax bracket, and timing of sales. We also provide protection strategies, such as the use of derivatives, to help manage risk around concentrated positions. Once clients have greater diversification in their portfolio, we can implement gifting or charitable strategies. All of this is to help build a safety net while you still have options. Beyond these overconcentration strategies, we can do a few more things to help you protect your lifestyle.
First, we create segmented income plans that fund 3–5 years of expenses from stable sources. Then we use a “bucket strategy” to insulate near-term income from market swings. At the same time, we help align your investment portfolio with your actual cash flow needs. We do all of this to help you enjoy retirement without worrying about every earnings report.
If you’re nearing retirement with a concentrated stock position, now is the time to act.
We can help build a transition plan that unlocks your wealth, reduces your risk, and helps protect the lifestyle you’ve worked so hard to build. Let’s schedule a time to discuss your specific situation.