Author Archive | Daniel Zajac, CFP®, AIF®, CLU®

Diversify stock options

Diversification Strategies for Company Owned Stock and Stock Options

Company-owned stock and stock options are assets that may generate significant wealth for the shareholder and yet pose the largest risk to future financial security. This risk reward tradeoff is inherent to investing, and yet it is heightened as one’s concentrated position increases. In truth, the value of a concentrated position may fluctuate wildly, and […]

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What Is a Qualified Charitable Distribution and How it Impacts Your RMD

For many retirees, the burden of meeting a required minimum distribution is an unwelcomed but necessary event.  This is an annual requirement that forces a taxable distribution from an otherwise tax-deferred account. Unfortunately, the penalty for not taking the distribution is severe: 50% of what should have been withdrawn. For retirees who find themselves in […]

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Catch up to retirement

What You Should Know About an 83(b) Election and Restricted Stock

A restricted stock plan is a compensation tool offered by employers to attract and retain key employees. Often times the restricted stock is not owed by the recipient until certain conditions are met, which is often the passage of a specific period of time. During this restricted period, the employee maintains no ownership rights to […]

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RMD's

What Retirees Should Know About Required Minimum Distributions

Traditional IRAs may allow for tax savings in the year of contribution as well as tax-deferred growth for many years to come. Unfortunately, traditional IRAs are also subject to the rules of required minimum distributions. Required minimum distributions are the IRS’s way of saying you have avoided paying tax for long enough. Specifically, long enough […]

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Dan Zajac, philadelphia financial advisor

Managing Concentrated Equity in Company Stock and Stock Options

Concentrated equity, also known as owning a large position in one company stock, can exist in many forms. One form of concentrated equity may be the result of working for an employer who has issued stock ownership via restricted stock and stock options. These types of stock ownership and stock rights allow an employee to […]

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Dan Zajac, philadelphia financial advisor

Using After-Tax Value to Evaluate Liquidation Priority of Concentrated Equity

Concentrated equity can be defined as owning a substantial position in one company’s stock.  For such concentrated positions, one risk for a single owner may be a lack of diversification*.  Or said another way, having too many eggs in one basket. However, concentration risk may not be a bad thing. In fact, concentration in one company stock […]

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Dan Zajac, philadelphia financial advisor

6 Strategies to Exercise Your Employee Stock Options

The choice to exercise your employee stock options can be a difficult one, regardless of whether you have incentive stock options or non-qualified stock options. Difficult because of the potential complexities of exercise and technical jargon required in the process. Other issues may be particularly paralyzing due to behavioral influences. For example, personal beliefs that the […]

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Dan Zajac, philadelphia financial advisor

The Basics of Restricted Stock

Restricted stock is often used as part of a compensation package for a key employee.  In lieu of increased wages, restricted stock may be offered. Specifically, restricted stock is a right to receive the shares of stock ONLY after you’ve satisfied specific conditions detailed by your employer.  Often, this condition is continuing to work for […]

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Dan Zajac, philadelphia financial advisor

Is a Non-Qualified Deferred Compensation Plan a Good Deal?

It’s common for employees that earn considerable income to be offered a non-qualified deferred compensation plan (NQDC). Simply put, an NQDC plan allows a plan participant to defer receiving a portion of income in the year it is earned, to later receive this income in the future. The deferral of income is also, in effect, […]

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Dan Zajac, philadelphia financial advisor

Exploring the Details of A Cash Exercise of Stock Options

When it’s time to exercise your employer-provided stock options, you generally have one of two options: a cash exercise or a cashless exercise. You may choose a cash exercise in the hope of achieving preferential long-term capital gains treatment on further appreciation of the stock. In addition, you choose a cash exercise in order to […]

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