Should I Sell My RSUs Immediately or Hold?

November 13, 2025 | By Jessica Goedtel, CFP®

Ahh, the biggest question for anyone who gets stock compensation. Should you keep your stock as it vests, or cash it out? It can be a heady feeling to watch your stock climb and climb. Or terrifying.

It can be tough to decide. Maybe you’re hearing people on the Slack investing channel how they’re going all in, or maybe it’s just too overwhelming to make a decision. Whatever the reason, let’s go over what you should consider when deciding to hold or sell.

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The Default Should Be Sell

I’ll be completely honest with you up front – I almost always recommend selling RSUs as they vest.

Sure, you can make a lot of money if the stock price keeps climbing. But believe it or not, the reverse is also true. While the overall market trends upwards over time, individual stocks decline all the time. Only around one fifth of stocks survive and actually outperform better than the market over a 20-year period.

Consider also that you work for this company. What happens if the company faces trouble? Not only is your job at risk, but potentially a significant portion of your net worth. I’ve seen it happen to people, and it SUPER sucks.

I’m not saying you need to sell all your shares, but it’s best practice to sell most as they vest.

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Understanding RSU Tax Implications

The best way to think about an RSU payout is that the company handed you a bonus, and you went and spent it on company stock.

Put it that way, what would you do?

Most people would reconsider their position on holding their shares. From a tax perspective though, that’s exactly what happens. When your RSUs vest, they are immediately taxable to you. Taxes get withheld (sometimes not enough!) and you get shares.

The shares you get are treated just like you went out and bought the stock. Your basis is the value of the stock at vest. When you sell, you get taxed on the difference between the sale price and the basis. You might be saying, “But Jess! I already paid taxes on these shares!” I agree, but the IRS says, “You know what’s better than taxes? More taxes!”

Stock sales are sorted into two tax categories: short-term and long-term. Long-term taxes are much lower than short-term, but you need to hold the stock for at least a year and a day to get it. With your RSUs, your holding period for capital gains starts on the day of vest. Sell it anytime in that first year, and the tax on the gain will be much higher.

And that’s another reason why I usually recommend selling right away. When you sell the stock right after it vests, the amount of gain (or loss) on the stock is usually limited. So, you can usually sell the stock with little or no tax implications.

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You Really Aren’t Missing the Boat

One argument I hear from people is that they think the stock is going to keep climbing, so they want to keep holding the stock as it goes up. But you know what else will go up? Your future RSU grants. If the stock price goes up and stays up, those shares will also vest at a higher price. As long as you’re at the company, you’re not missing out on its growth.

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When It Makes Sense to Hold Your RSUs

I’m a financial planner, so it’s my job to mention all the things you should focus on first before holding on to company stock. Things like: paying off your credit card debt, having enough saved for emergencies, and contributing to your 401k.

But if you’re financially healthy, and I still haven’t convinced you to sell, let’s talk about when it might make sense to keep some stock.

• You’re confident the stock is going to keep going up. This one is obvious, but critical.
• You already hold some stock that has low basis. Better to keep these shares over ones with higher basis.
• It’s money you won’t miss. If the stock drops significantly, you’ll be bummed but still happy you gave it a shot. In other words, you’re willing to take on a lot of risk at the chance of a higher reward.

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How Much Should I Hold?

A good rule of thumb is to keep any single stock position to 5% of your overall net worth. Some people go higher, but I’m more cautious with employer stock. The fact that you work there bears repeating.

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One Final Note

Whether you plan to hold or sell, I have one additional key bit of advice: Make a decision and stick to it. Don’t second guess yourself! You can have a different strategy for each vesting, but stick to the plan.

Still feeling overwhelmed by what to do? I help my clients make a plan for each RSU vesting and take the guesswork out of the equation. Schedule a introductory call with me today if you want to learn more.