Restricted Stock Units (RSUs) are a common part of compensation in tech and high-growth companies. They're exciting—but also confusing. At MoneyOnFire, we treat RSUs as a core financial decision—not just compensation—and help you handle the complexity.
Why RSUs can be confusing
RSUs create a tangle of tax obligations, timing decisions, and emotional tradeoffs:
- They vest → You owe taxes
- You sell → You trigger capital gains
- You hold too long → You take unnecessary risk
- You forget tax implications → You stress about taxes
- You ask "hold or sell?" → You get generic advice like "sell them, because diversification"
The result? Most people sell too soon, hold too long, or fail to integrate RSUs into their broader FI plan—leading to:
- Surprise tax bills
- Overexposure to a single company
- Missed opportunities to fund critical goals (like financial independence)
How MOF integrates RSUs into your plan
Traditional spreadsheets and planning tools rarely account for RSUs correctly—especially when it comes to vesting schedules, taxes, or financial priorities. MOF builds them directly into your FI journey.
1. Cover your tax bill first
When RSUs vest, MOF ensures you don't get hit with an unexpected tax burden. Our system may recommend selling a portion right away to cover taxes and keep your plan on track.
2. Fund your highest priorities
After taxes, MOF checks whether your RSUs can help fund other key goals like:
- Emergency fund
- High-interest debt payoff
- Retirement contributions (IRA, 401(k))
- Other important near-term goals
3. Model the tradeoffs
Should you sell or hold? MOF models both paths:
- What happens if you sell and diversify?
- What happens if you hold and ride the stock price?
You choose based on your risk comfort—MOF just shows the impact on your FI timeline.
4. Woven into your FI plan
RSUs aren't bolted on. They're part of your entire MoneyOnFire strategy. That means your savings targets, timeline, and monthly contributions automatically account for them.
FAQ
Should I always sell my RSUs when they vest?
It depends. Selling helps cover taxes and fund higher-priority goals. Holding offers more upside—but more volatility. MOF helps you see the tradeoffs and decide with clarity.
How does MOF decide what to do with RSUs?
First, MOF ensures your tax burden is covered. Then it checks whether RSU sales can help fund goals like debt payoff or IRA contributions. Once those are handled, it runs what-if scenarios—helping you compare sell vs hold and the impact on your FI journey.