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Understanding NUA

Understanding NUA

| February 01, 2023

Today I’ll be talking about the distribution of employer stock from 401(k) plans. If you decide to retire or change jobs while participating in an employer-sponsored retirement plan, there are some important things to keep in mind. I will discuss the key decisions you will probably need to make and share crucial insight into Net Unrealized Appreciation (NUA) of employer stock.

Listen in to learn about what happens when these securities roll over into an IRA, as well as the big disparities that could happen. I’ll also give you some tips on tax-saving strategies that will help ensure you get a more favorable tax rate and avoid penalties. There are some great strategies you can employ to allow you to adjust your plan to fit your specific financial needs, so don't miss this episode! 

Listen To The Episode Here:

What You’ll Learn: 

  •  Why you need to stop and think before rolling everything into an IRA.

  • What an NUA is and why it’s so important when it comes to getting the fair value of your employer stock.

  • Where tax-saving strategy is important.

  • What the cost-basis is and how to avoid penalties.

  • How you may be entitled to a more favorable tax rate.

  • The benefits of NUA.

  • Why it’s important to discuss your strategy with a tax specialist or financial advisor.

  • Where to check for increased fees.

Ideas Worth Sharing:

  • “While many choose to roll over their plans into an IRA, if you have company stock in your plan, you could forfeit a significant tax advantage called Net Unrealized Appreciation.” - Regina McCann Hess

  • “Because there may be significant tax advantages when you take securities from an employer-qualified plan, you should consider whether taking a portion of the employer shares in-kind from the plan is the right strategy for you.” - Regina McCann Hess

  • “Please be aware that rolling over retirement assets into one IRA account could increase fees.” - Regina McCann Hess


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