Should you sell your RSUs immediately, or wait?

Each time a batch of RSUs vests, the same question comes up: cash out immediately, or hang on to the shares? Ordinary income tax on the full value at vest is owed either way. What you do next is a separate decision, one you'll face again at each vesting date.

There isn't one right answer. Sell immediately, and you convert the shares to cash without adding to the tax bill you already owe at vest. Wait even briefly, and any gain from that point forward becomes its own taxable event once you sell. Hold on, and you keep your upside if the stock performs well, but you're layering concentration risk on top of tax you've already paid.

Investors who've accumulated a sizable RSU position across multiple vesting cycles have a third path worth considering: an exchange fund lets you diversify without selling right away.

Why some investors sell RSUs at vest

Selling at vest is the default choice most financial advisors recommend, and for an ordinary-sized vest, it makes sense. Because income tax is already paid on the full share value, a same-day sale doesn't create a meaningful second tax bill. You end up with cash to put into a diversified portfolio, pay down debt, or spend, without adding to whatever single-stock exposure you're already carrying.

The catch: once sold, you're out of the position permanently. Any further gains in the stock happen without you.

Why some investors hold RSUs

Holding preserves your exposure to future gains. A company's rising stock price could mean an RSU grant is worth considerably more a year or two out than the value you were taxed on at vest.

That upside isn't free. You risk carrying concentrated single-stock exposure longer than may be comfortable for you. And to be clear, holding doesn't get you out of the capital gains bill. Whenever the shares are eventually sold, any appreciation since vest is a taxable gain.

The third option: exchange funds

An exchange fund offers diversification, defers any capital gains owed, and keeps your money invested. The tradeoff is a lockup, typically around 7 years.

Here's how it works mechanically: appreciated stock from many investors gets pooled into one diversified fund, and each investor receives a stake in that pool rather than cash. Since shares are being exchanged rather than sold, no taxable sale is triggered.

The capital gains tax owed is deferred, not eliminated, typically until redemption after the required holding period passes. Most exchange funds set that period at seven years, and the shares eventually received back carry the original cost basis forward.

An exchange fund won't make the tax bill disappear forever, and it's not automatically the right call either. It solves a specific problem: a large, appreciated, concentrated position where diversifying without a big sale right now matters, and where committing the position for several years is workable.

Glidepath is one exchange fund example. Getting in takes accredited investor status and a $100,000 minimum contribution, with no management fee charged to members.

Worrying about concentration risk after seeing your RSUs pile up? Find out if you qualify for the Glidepath fund.

Once RSUs pile up: weighing your options

A single vest is usually a manageable decision either way. It becomes harder once multiple years of vesting have built a position worth a meaningful slice of your net worth. At that scale, selling it all at once can trigger a capital gains bill large enough to shape the decision.

Here's roughly how the three main paths stack up once a position reaches that size:

Here's a worked example of what that capital gains exposure looks like in a large accumulated RSU position:

• Vested RSU value today: $420,000
• Value at vest (already taxed as income): $260,000
• Unrealized appreciation since vest: $160,000
• Est. federal long-term capital gains tax if sold today (20%): $32,000

That $32,000 is what it costs to remove all concentration risk today (plus any applicable state tax, not counted here). Whether paying it now, deferring it, or holding instead makes more sense depends on liquidity needs and timeline, not a fixed rule.

Three ways to handle your RSUs

Selling right away, holding, or exploring an exchange fund all come down to the size of the position, your tax situation, how soon cash is needed, and how much single-stock risk feels manageable.

Ready to do something about your appreciated RSUs? Get started to see how much you can diversify and defer.