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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: secondcor521 on April 28, 2015, 01:34:29 PM

Title: OMY / tax planning question
Post by: secondcor521 on April 28, 2015, 01:34:29 PM

I plan to work all of this year.
I might retire next spring, or I might work a while longer.
I have some options that vest on December 9th.
My company stock's beta is about 1.6.

Which of the two options would you pick if you were in my shoes:

1.  Exercise the options on December 9th.  Bird in the hand and all that.
2.  Exercise the options on January 1st, 2016.  Postponing the taxes due for another 12 months, plus if I retire next year probably pay taxes at a lower rate.  Difference in tax rates is likely to be 13 percentage points.

Title: Re: OMY / tax planning question
Post by: Catbert on April 28, 2015, 10:33:37 PM

Option 2 assuming that your tax rate will be lower the year you retire.  I seems unlikely that the price would be significantly different by waiting two weeks.  Just as likely to be higher as lower by waiting.