Inbox Question | Company Stock in 401K
Big Picture Retirement®
Devin Carroll
4.7 • 545 Ratings
🗓️ 1 May 2025
⏱️ 9 minutes
🧾️ Download transcript
Summary
In this episode, Brian asks some great questions about using Net Unrealized Appreciation (NUA) for company stock inside a 401(k). We dive into the rules, timing, and strategies that could lead to major tax savings—if you do it right.
We cover:
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What exactly is NUA and why it matters
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Can you use NUA before retirement?
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Do you need to be age 59½?
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Can you move the stock out in segments, or does it have to be all at once?
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Common mistakes that could cost you
Although this show does not provide specific tax, legal, or financial advice, you can engage Devin or John through their individual firms.
📍Contact Devin's team at https://carrolladvisory.co/podcast1
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Transcript
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| 0:00.0 | Welcome to the Big Picture Retirement Show. |
| 0:07.7 | Today, we're going to the inbox to answer questions sent in by you, our listeners. |
| 0:12.3 | Now, if you'd like to send us a question, just head over to big pictureretirement.com and click the Ask a Question tab in the top menu. |
| 0:18.9 | Oh, and just a quick reminder. |
| 0:19.9 | On this podcast, we provide |
| 0:22.0 | general information and not specific tax, legal, or financial advice. But if you're ever ready |
| 0:28.3 | to move from the broad education we provide here to personalized advice that's specific to you, |
| 0:34.7 | you can find links to our websites down in the description. Now let's jump in |
| 0:39.1 | to today's question. John, today's question comes from Brian, and it's about company stock |
| 0:48.8 | and a 401k. So Brian actually has three questions here that's all related to this. First, he said, |
| 0:55.2 | I know I can move company stock out of my 401k at retirement and only pay taxes on the basis. |
| 1:00.4 | Can I move it before retirement, but after age 59 and a half without penalty? So let me, let me hit the |
| 1:07.6 | brakes for just a moment and explain what Brian is asking here with this whole thing about company stock and its 401K. |
| 1:14.2 | So in some cases, you'll find people that have company stock in their 401k and, you know, let's say that it's worth $100,000. |
| 1:23.0 | But their basis in that stock is only $10,000, right? |
| 1:28.3 | So what they put in was $10,000. |
| 1:30.1 | What it's worth now is $100,000. |
| 1:32.7 | So technically there's a $90,000 gain there. |
| 1:36.3 | But it's in their 401K. |
| 1:38.2 | And ordinarily, anything that comes out of your 401k is taxed as ordinary income. |
| 1:42.5 | So there's this rule called net unreliable depreciation |
| 1:45.5 | that allows you to take that company stock, move it into a non-retirement account. So this would just |
... |
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