Retirement
Retirement math when 60% of your net worth is one employer's stock. Mega-backdoor Roth with equity cash flows, Roth conversion ladders, sequence risk with concentrated positions.
Retirement planning for a tech employee with equity comp is structurally different from the generic playbook. Most retirement advice assumes a broadly diversified portfolio and relatively stable income. Neither holds here. Your net worth is likely correlated to a single stock; your income is lumpy around vesting events and IPO dates. Both facts cascade through every decision about contribution accounts, withdrawal planning, and when to actually stop working. The “save 15% of your income” rule doesn’t know how to handle a year you got a $2M IPO windfall or a quarter where your employer stock dropped 40% and just paused your de facto savings.
The account-stacking sequence most tech earners miss
For anyone above the Roth income phase-out, the value of tax-advantaged space compounds in a specific order. Traditional 401(k) comes first, up to the $23,500 limit (2025). A mega-backdoor Roth — after-tax 401(k) contributions converted to Roth — is the next and often largest bucket, depending on whether your plan allows it. Backdoor Roth IRA at $7,000 is smaller but still worth automating. The sequencing matters because equity income years are exactly when you have both the cash flow and the need to shelter it.
The retirement-concentration calculator illustrates why concentration is the dominant risk: a 30-year retirement plan with 60% of assets in one stock looks very different from the same plan fully diversified. A mid-retirement 50% drop in the concentrated position erases 20-30% of projected ending wealth. That’s the quantified cost of holding too much employer stock into retirement.
Roth conversions in low-income years
The moments most tech earners mishandle are the transition years: leaving a job, a sabbatical, the year before Social Security. Ordinary income drops, the brackets are cheaper than they’ll be again, and Roth conversion ladders become much more valuable than they look. A year with $60k of income and $200k of traditional IRA to convert at 22% federal is completely different arithmetic from the equivalent conversion at 35%. The article on low-income conversion timing walks through the decision tree. For equity earners, the window is often 12-36 months between pre-IPO and post-IPO, or between a job transition and the next role.
Concentrated-stock retirement: NUA and asset location
If you participate in an employer 401(k) that holds company stock, Net Unrealized Appreciation (NUA) at separation or retirement lets you move the company stock out at basis and pay long-term capital gains rates on the appreciation rather than ordinary rates. It’s a one-shot election that can save six figures in tax, and it’s easy to miss if your custodian defaults to an in-kind rollover. Asset location — deciding which investments live in tax-advantaged accounts versus taxable — matters more when your concentrated position sits in the taxable account and dictates everything else.
The sequence-risk article covers the underappreciated danger: it’s not the average return that breaks a retirement plan, it’s when the bad years happen. A 50% drop early in retirement, with active withdrawals, is much worse than the same drop late. When the concentration is employer stock, that risk is amplified by correlation with your former compensation and healthcare dependencies.
IPO-year and IRMAA
The year of a liquidity event is where retirement-relevant surcharges kick in. IRMAA, the Medicare Part B/D income-related surcharge, is assessed with a two-year lookback on modified adjusted gross income. An IPO-year MAGI of $2M on the 2028 return drives 2030 Medicare premiums to the top IRMAA tier. Planning around this is about income smoothing in adjacent years, not avoiding the IRMAA year itself.
Social Security timing has a similar dynamic: claiming at 62 vs 67 vs 70 produces different outcomes for someone who already has seven-figure liquidity. The math favors delay for high-net-worth retirees more than it does for average ones.
Next step
If you’re in your 30s or 40s with RSU-heavy comp, the leverage is in the mega-backdoor Roth. Check whether your 401(k) plan allows after-tax contributions with in-plan Roth conversion; if yes, automate it. If you’re within 5-10 years of retirement with a concentrated position, the retirement-concentration calculator is the fastest way to size the diversification urgency. If you’re in a liquidity-event year, the IRMAA lookback and AMT interactions need a CPA with tech-wealth experience — match with an advisor before year-end.
Where you hold each asset class matters almost as much as what you hold. For equity-heavy savers, asset location between Roth, traditional, and taxable accounts can shift after-tax wealth by 15-20%.
The HSA is the only account with three layers of tax advantage: pre-tax contributions, tax-free growth, and tax-free medical withdrawals. A 20-year HSA can hold $300K+.
Medicare bases IRMAA on MAGI from two years prior. An IPO-year windfall at 63 can push IRMAA surcharges at 65 into the top tier for years.
RSU-heavy earners can push ~$46,000 of after-tax dollars into a Roth through the mega-backdoor, here's how the plan mechanics work and who qualifies in 2025.
- Asset Location: Roth vs Traditional for Equity-Heavy Savers
Where you hold each asset class matters almost as much as what you hold. For equity-heavy savers, asset location between Roth, traditional, and taxable accounts can shift after-tax wealth by 15-20%.
- HSA as a Retirement Equity-Planning Tool: The Triple-Tax-Advantaged Bucket
The HSA is the only account with three layers of tax advantage: pre-tax contributions, tax-free growth, and tax-free medical withdrawals. A 20-year HSA can hold $300K+.
- IRMAA Surcharges in IPO-Year Retirement: The 2-Year Medicare Look-Back
Medicare bases IRMAA on MAGI from two years prior. An IPO-year windfall at 63 can push IRMAA surcharges at 65 into the top tier for years.
- Mega-Backdoor Roth: The After-Tax 401(k) Strategy for RSU-Heavy Earners
RSU-heavy earners can push ~$46,000 of after-tax dollars into a Roth through the mega-backdoor, here's how the plan mechanics work and who qualifies in 2025.
- Net Unrealized Appreciation (NUA) from 401(k) Employer Stock at Retirement
If your 401(k) holds company stock purchased at low prices, NUA under IRC §402(e)(4) can convert most of the gain into long-term capital gains instead of ordinary income.
- Planning Retirement Around an Expected IPO
If your IPO is 12-24 months out and retirement is on the table, the sequence of lockup, tax bracket, and Medicare enrollment drives a complex multi-year plan.
- Roth Conversion Ladders in Low-Income Years (Between Jobs, Sabbatical, Pre-Social-Security)
A year of low earned income is a gift for Roth conversions. Fill the 12% and 22% brackets with pre-tax IRA dollars and compound them tax-free for decades.
- Safe Withdrawal Rates With Equity Volatility: Why the 4% Rule Needs Adjustment
The 4% rule was built on diversified 60/40 portfolios and historical U.S. returns. Equity-heavy retirees need to adjust, sometimes down to 3% or less.
- Sequence Risk When 60%+ of Retirement Is One Stock
Sequence-of-returns risk is bad for any retiree. It's catastrophic when 60%+ of the portfolio is concentrated in one stock. The math of withdrawal in a 40% drawdown year.
- Social Security Claiming Timing When You Have Large Equity Income
Equity-heavy retirees often have large lumpy AGI in specific years. That changes the Social Security claim-timing decision compared to standard advice.
- Roth Conversion Ladders When Equity Distorts Your Income
How to use low-income years between tech roles or before Social Security to convert traditional IRA dollars to Roth at lower effective rates.
- Retirement Math When 60% of Your Net Worth Is Your Employer
Sequence-of-returns risk, sustainable withdrawal rates, and the Roth conversion moves for households whose retirement rides on one stock.