Switched Jobs In Tech? Here’s What To Do With Your Equity

True Root Financial is a fee only financial advisor and financial planner based in San Francisco, CA. We serve clients across the globe.

Most professionals earn a straightforward salary. But in tech, compensation is a mix of salary and equity. And while stock can be a source of significant wealth, it comes with complexities, irregular vesting schedules, concentrated risk in one company, volatile stock prices, and confusing tax rules.

If you are a tech professional interested in learning how we can help you claim your financial independence by investing wisely, minimizing taxes, and maximizing your equity compensation, please book a no-obligation call here.

Whether you’re moving to a new opportunity or taking a break, watch the video below to learn 3 vital steps which will help you optimize your exit strategy, minimize tax risks, and leverage your equity for future flexibility.

Key Takeaways:

Review and strategize around your stock and options
Create a financial plan to align your assets with your goals
Be proactive about taxes before you sell or exercise
Leverage your equity for flexibility and negotiation power.

When Do Tech Professionals Seek Financial Advice?

We often work with clients at three key moments:

An Exit Event (IPO, acquisition, or job change): Suddenly, once-illiquid shares are now worth a significant sum. Managing that windfall without a plan can lead to taxes, emotional decisions, and lost opportunities.
A Life Pivot: Some clients leave their roles to start a business, travel, or simply take a break. They want clarity on how much they can spend, save, or reinvest without jeopardizing their long-term goals.
Maximizing Stock Benefits: Whether it’s RSUs, ISOs, or ESPP shares, many want to ensure they’re using these tools wisely to grow wealth, reduce taxes, and eventually reach financial independence.

Let’s walk through how to make the most of your equity when switching jobs in tech.

1. Plan Your Exit Strategy

Step 1: Take Inventory of Your Company Stock

Before you even put in your notice, understand what you own.

RSUs: Are they fully vested? If not, when’s your next vesting date?
Stock Options: Are they ISOs or NSOs? What’s the strike price and expiration timeline?
ESPP Shares: Do you have any holdings from recent purchase periods?

Vested RSUs and ESPP shares usually remain yours after you leave, but stock options are a different story; you may only have 90 days to exercise after departure. Missing this window can mean losing thousands (or more).

If you’re close to a major vesting event, it might be worth waiting a few more weeks or months before leaving.

Step 2: Revisit Your Financial Plan

Think of your financial plan like a cross-country road trip.

Your destination is your long-term goal: early retirement, a startup, or financial independence
Stops along the way are your short-term goals: buying a home, taking a sabbatical, or starting a family
Your resources are your cash, equity, savings, and investments
Your risks are market volatility, job changes, or concentrated stock positions.

A comprehensive plan helps you weigh trade-offs, prioritize goals, and understand how much equity you need to hold vs. what you can safely diversify.

Step 3: Diversify Your Equity Holdings

Tech professionals often hold too much of their net worth in one stock: their employer’s. This is risky. Even companies that seemed unstoppable (Cisco, Intel) have faltered over the years. No company is immune.

We perform a “gap analysis” to help clients decide how much stock they must keep vs. how much they can safely sell. We plug your goals into a financial model and remove your company stock from the picture to see how big the shortfall is.

From there, we create a selling schedule to diversify your holdings gradually and tax-efficiently.

Step 4: Decide When to Exercise Stock Options

Stock options present both opportunity and risk.
Exercising now could secure gains but may trigger taxes (especially AMT for ISOs).
Waiting might expose you to price volatility or worse, expiration.

Don’t let emotions guide your decisions. A financial advisor can help you run the numbers and decide what strategy best supports your long-term goals.

2. Minimize Taxes

Step 1: Know Your Tax Rules

Stock compensation has its own tax code:

RSUs are taxed as income when they vest.
ESPP shares may be taxed as either income or capital gains, depending on how long you hold them.
ISOs can trigger the Alternative Minimum Tax (AMT) if not handled properly.
NSOs are taxed as income when exercised.

Step 2: Plan Taxes Before Selling or Exercising

Let’s say you sell your ISOs immediately after exercising. That’s considered a disqualifying disposition, meaning you pay income tax rates much higher than capital gains.

What to do when you miss the favorable tax treatment?

Review your prior-year tax returns
Run a current-year tax projection
Adjust your 401(k) to traditional contributions to lower taxable income
Use a donor-advised fund to offload appreciated shares, cutting taxable income further.

You can space the stock sales over multiple years, reducing your tax bracket and keeping more money invested.

Step 3: Keep Track of Tax Deadlines

Exercising options? Selling shares? You may owe taxes quickly, especially with NSOs or large RSU vests. Missing deadlines could lead to penalties or surprise tax bills.

And remember: RSU and ESPP events often overlap, which can compound your tax liability in one calendar year.

Working with a tax-savvy financial advisor can help you forecast your liability and explore legal ways to reduce it.

3. Leverage Equity for Career Flexibility

Step 1: Use Equity for Future Plans

Your equity can be the springboard to something new, whether that’s launching a startup, taking a year off, or pivoting to a different field. But you need to know how much you can safely spend. Again, this comes down to good financial planning. We work with clients to segment their wealth into:

Funds to cover short-term needs (e.g., emergency funds, sabbatical costs)
Long-term investments for retirement or passive income
Opportunistic capital (e.g., startup investments, real estate)

Step 2: Negotiate Better Terms at Your New Job

When switching roles, don’t forget to negotiate for what you’re leaving behind.

If you’re walking away from unvested RSUs or options, use that as leverage to ask for a signing bonus, more RSUs, or better vesting terms at your new company.

Being strategic here could add tens of thousands of dollars (or more) to your compensation package.

Ready For a Personalized Plan? Your Next Steps:

Don’t navigate this alone. We offer one-on-one sessions tailored to your specific situation. We’ll review your equity, map out your goals, run tax projections, and build a strategy to turn your stock into long-term wealth when switching jobs. Book a free consultation:

Switched Jobs In Tech? Here’s What To Do With Your Equity

Key Takeaways:

When Do Tech Professionals Seek Financial Advice?

1. Plan Your Exit Strategy