What Happens When You Own Company Stock Inside Your 401k and It’s Time to Leave?

These days, companies must get creative about the ways in which they both compensate and motivate their workforce. And one of the most popular practices is to offer employees opportunities to purchase shares of the company's stock through their 401(k) plan.

In some instances, employees are able to accumulate a sizeable number of those shares and defer taxes on any growth in the process. But what happens to those shares when it's time to part ways with that employer?

In this episode of Malcolm on Money Office Hours, Malcolm shares details on a lesser known strategy that anyone who has accumulated shares of company stock inside their 401(k) account should know about. He also lays out how to execute such a transaction, as well as some issues to be aware of prior to submitting rollover paperwork.

Malcolm Ethridge, CFP® is the Managing Partner of Capital Area Planning Group based in Washington, DC. He is also the Managing Partner of Capital Area Tax Consultants. 

Malcolm’s areas of expertise include retirement planning, investment portfolio development, tax planning, insurance, equity compensation and other executive benefits. 

 Disclosures:

The information provided is for educational and informational purposes only, does not constitute investment advice, and should not be relied upon as such. Be sure to consult with your legal advisors before taking any action that could have tax and legal consequences.

Investments in securities and insurance products are:

NOT FDIC-INSURED | NOT BANK-GUARANTEED | MAY LOSE VALUE