For many of our clients, vested RSUs make up a significant part of their portfolios. Overconcentration is never advisable, but in today’s volatile market, it can be disastrous.
In this short video, we dive into the dangers of overconcentration in the 2026 market.
Watch now to learn strategies for managing your RSUs and shielding the wealth you’ve built.
Transcript
If you’ve been accumulating RSUs over the years, what I’m about to share is directly relevant to you. The volatility we’ve seen in 2026 has been a sobering reminder of why having a proactive plan matters, and why waiting is a decision in itself. In late March, four of the top 10 S&P 500 companies had fallen more than 20% from their 52-week highs. Employees holding concentrated employer stock got hit even harder than the broad index.
I’m Steve Erfle with Thrive Wealth Management. Today I want to walk you through what you should be thinking about before your next vest, especially right now.
Why RSU Diversification Matters
Let me share a story that I’ve seen play out more times than I’d like. An executive with 8 years of accumulated RSUs, smart, successful, and 47% of her net worth was tied to one stock. She kept telling herself she’d diversify after the next vest. The M&A rumors hit, the stock dropped 28% in six weeks, and because her RSUs had been underwithheld for taxes, she got a nasty surprise at tax time on top of it all.
The Cost of Waiting to Diversify RSUs
The hard truth. A diversification plan started even two years earlier could have changed everything. The goal isn’t to perfectly time the market, it’s to stop letting inaction make decisions for you.
What to Consider Before Your Next RSU Vest
RSUs in a shifting market. June is actually one of the most common RSU vest windows, and this year it lands right in the middle of some serious volatility. Summer is always when most people have real cash needs: vacations, home projects, tuition. That timing makes it even more critical to have a clear plan before you vest. So before your next vest, here are the three dangers I want you to be aware of.
Concentration Risk and Employer Stock Volatility
Danger number 1: Concentration risk amplified by volatility.
Overconcentration can sneak up on you faster than you think. Executives frequently have 30-60% of their net worth tied to a single stock, often their employer. No matter how great the company is, a 50% roll down requires 100% gain just to get back to even. At that level of concentration, you’re not just risking returns, you’re risking your retirement.
RSU Tax Timing and Withholding Risks
Danger number 2: The tax timing trap.
RSUs are taxed as ordinary income the day they vest. Not when you sell. Here’s where it gets tricky. The default withholding rate is only 22%. If you’re in the 32% bracket, you may be underwithheld. And if the stock drops after vesting, and you’re selling at a loss, you’re still taxed on the full vest day value. This means you could owe taxes on gains you never actually kept. Planning ahead with your advisor can help you avoid that trap.
The Cash Account Mindset for Vested RSUs
Danger number 3: The cash account mindset.
Here’s a reframe that tends to hit people pretty hard: when you hold vested RSUs, you’re essentially making a decision every day to buy your employer’s stock with after-tax dollars at market price. Ask yourself, if you had cash in your account right now, would you choose to put it all in this one stock? Most people wouldn’t. So waiting until it comes back is really letting concentration quietly compound over time.
Creating a Structured RSU Diversification Plan
We’re here to help. If you want to protect what you’ve built, the answer isn’t watching and waiting. It’s having a structured plan. A diversification schedule takes the emotion out of the decision and puts a plan on autopilot. It aligns your RSUs with your actual financial goals, retirement, cash flow, taxes, not just your best calendar. And as always, if you’d ever like to talk through your specific situation, we’d love to hear from you. Reach out anytime.
