30% of Your Retirement Savings in One Company? Bad Idea, Says Wes Moore

Billy from Georgia is 45 years old, hopes to retire at 55, and has a problem disguised as an asset. As part of his compensation, Billy’s company pays Restricted Stock Units (RSUs). Those shares have grown to around $300,000, roughly 30% of his total investments. The other 70% sits in retirement accounts. His plan is to hold the RSUs until age 55 and use them as a brokerage account to bridge early retirement.

But on a recent episode of The Clark Howard Podcast, financial advisor Wes Moss warned that the plan comes with serious risk. “Your real problem here is a diversification problem,” he said. “You’ve got one company, it’s 30% of your total savings, which is arguably way too much.”

A single stock representing 30% of a portfolio is a concentrated bet regardless of how strong that company looks today. History is full of employees who watched their retirement savings collapse because their employer’s stock did. “You don’t want to go into retirement and say, okay, I’m going to have this account fund me,” Moss explained. “And then the next thing you know, the stock’s down 30%, 40%, 50%.”

A Phased Diversification Suggested

Moss recommended that Billy aim to reduce his exposure to RSUs from 30% to 10-15%. That means selling roughly $150,000 worth of the single-company RSUs and reinvesting the proceeds into a diversified brokerage account.

But Billy is worried about tax consequences. “I don’t want to create a tax bomb now or in the future,” he said.

Moss’s approach reduces concentration risk without forcing a large taxable event in any single year. The proceeds could land in a taxable brokerage account, which is exactly the vehicle Billy needs to fund the gap between age 55 and 59½, when retirement accounts become accessible without penalty.

Billy already maxes out his Roth 401(k) and health savings account (HSA) annually, which means his tax-advantaged accounts are as full as they can be. The brokerage account becomes the third leg of a well-structured early retirement plan, but only if it holds a diversified portfolio rather than a single employer stock.

How RSU Taxation Works and Where the Traps Are

RSUs are taxed as ordinary income at vesting, not at sale. By the time Billy considers selling, he has already paid ordinary income tax on the shares when they vested. What he owes on a sale depends on how long he has held the shares after vesting and his income in the year he sells.

Moss highlighted two specific thresholds that should govern Billy’s selling strategy. First, the 15% long-term capital gains bracket, which applies to those earning up to $545,000 for singles and $613,700 for married filing jointly. Selling shares held longer than one year after vesting while keeping total income below that threshold keeps gains taxed at 15%, rather than 20%. Second, the net investment income tax (NIIT) of 3.8%, which kicks in at $250,000 of modified adjusted gross income. Cross that line and investment gains get an additional 3.8% surcharge on top of the capital gains rate.

The practical implication: Billy has 10 years before his target retirement date, which gives him a real window to sell in tranches, manage his annual income carefully, and avoid triggering the highest rates. Selling everything at once in a single high-income year could indeed be a tax bomb.

What Billy Should Do Before His Next RSU Vesting

Before the next RSU grant vests, Billy should estimate his total income for the year and map out how much of the existing RSU position he can sell while staying below the $250,000 NIIT threshold and not going above the 15% long-term capital gains bracket. The proceeds from each sale could move into a diversified brokerage account holding low-cost index funds or a mix of equities and fixed income appropriate for a 10-year runway. With the 10-year Treasury yield near 4.3%, the bond portion of that account can generate meaningful income while Billy continues working.