Navigating a Windfall & Career Burnout
Case Study
The Client: Sarah
Ages: 52
Professions: Senior Director at a tech company that was just acquired.
The Situation
Sarah had worked at a tech startup for a decade, accumulating significant equity compensation (ISOs, NSOs, and RSUs). Her company was just acquired by a large, publicly-traded corporation, and her private shares converted into a life-changing amount of the new company’s stock. Overnight, 75% of her net worth was tied up in one single stock. She was also burned out and wanted to know if this was her “enough” moment, but she was terrified of the massive tax bill and the risk of having all her eggs in one basket.
Her Key Questions
Can I actually afford to retire now, or am I crazy?
How do I deal with all this company stock? I don’t want to lose it all, but selling it will trigger a huge tax bill.
I have all these different types of stock options. What is the smartest way to exercise and sell them?
If I do retire this early, how do I make my money last for 40 or 50 years?
Our Process & Solution
Equity Compensation & Tax Analysis
We immediately analyzed every single one of her stock grants (ISOs, NSOs, RSUs), their new vesting schedules, and the tax implications of each. We created a detailed exercise-and-sell strategy to spread the tax impact over two years, balancing the tax cost against the risk of holding a concentrated position.
Financial Independence & “Work Optional” Plan
We ran multiple financial plan scenarios. The first showed she could, in fact, retire immediately and live very comfortably. The second modeled a “one more year” scenario. Seeing the concrete trade-offs, she chose to stay for 18 more months to vest a final tranche of stock, giving her an extra buffer of security and peace of mind.
Tax-Managed Diversification Plan
We built a systematic plan to carefully sell her company stock and reinvest the proceeds into our globally diversified, evidence-based portfolios. To help offset the large capital gains, we:
- Used tax-loss harvesting in her other accounts.
- Funded a Donor-Advised Fund with a large block of appreciated shares, giving her a significant charitable deduction in her highest-income year.
The Outcome
Sarah navigated the acquisition with a clear, strategic plan, avoiding devastating tax mistakes and reducing her concentration risk. She now has a diversified portfolio designed to fund her early retirement. She has the confidence and, most importantly, the permission to leave her high-stress job, knowing her financial future is secure.