Strategy

Many people default to holding their RSUs without stepping back to ask whether they’d actively choose to buy company stock with a cash bonus. Here are the core points from the lesson:

• Since RSUs are taxed as ordinary income upon vesting, treating them like a cash bonus and selling immediately is often a lower-risk strategy—especially when combined with auto-sell and supplemental withholding features some companies offer

• You can also take a more nuanced approach, like retaining a portion based on your net worth, holding for a set period, or setting specific sale triggers, but it's best to define these plans before emotions kick in

• A minimum financial bar is covering tax liability; use safe harbor rules or proactive withholding adjustments to avoid penalties, especially as year-end approaches

• Flow-based budgeting using separate accounts by expense type and timeline can help you allocate RSU income toward irregular goals like large purchases or saving targets

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