Got a Bonus or RSUs? 4 Important Money Moves to Make

August 26, 2025 | By Jessica Goedtel, CFP®

So you’ve been in the tech world a while, working hard, building your skills, and climbing the ladder. And now you’re finally seeing the payoff. Maybe it’s your first big performance bonus, or those long-awaited RSUs just vested. First off, congratulations! This is a huge milestone in your career.

But with that excitement comes new questions: What should I actually do with this money? It’s both thrilling and overwhelming. Do you splurge on something you’ve always wanted, or put it away for a rainy day? How much will taxes take, and do you need to save more for that? Or should you invest and hope that money grows even more?

Here are four things to consider with your new windfall:

Taxes on Bonuses and RSUs

Right off the bat, a chunk will get taken for taxes (womp womp). You’ll have the usual Social Security taxes, unless you’ve hit the SS cap for the year, and Medicare taxes. Then there’s the big one: Federal withholding. Unlike your regular pay withholding, which is set based on your W-4 elections, Fed withholding on bonus payouts is a flat rate of 22%.

There’s an important point I want to make here: what gets withheld for taxes isn’t how much you will get taxed. The difference between what gets withheld and what gets taxed is why you have either a refund or owe money each year when you file your taxes. For example, if you’re in the 32% tax bracket when you get your payout, you’ll be 10% short.

In some cases, your employer may allow you to increase bonus withholding to a higher percentage. Pro-tip: ask your employer if this is an option before you get any bonus payouts.

Don’t forget about state taxes, either. Many states also have supplemental wage withholding. You can look up your state information on this handy website from ADP.

So before you do anything else, set aside any extra money you’ll need for taxes. And if you aren’t sure how much, let’s chat!

Superfund Your Retirement Savings

When people think about what to do with a windfall, I doubt saving for retirement is at the top of the list (unless you’re a financial planner). But it should be. Windfalls are an outstanding way to superfund your retirement savings. You may have no idea when, how, or why you want to retire yet, but you will someday. Future you will be glad that you thought ahead and put that money aside.

What you do depends on the kind of payout you get:

If it’s a cash bonus, you can use some money towards maximizing your 401(k). Some companies have a separate bonus election for 401(k)s, so you can really pump it up. Plus, you make an immediate return on your money with your employer match on top of the tax benefits. Pro-tip: If you don’t have the option to pick a separate 401(k) bonus election, temporarily increase your contributions on that pay cycle.

If it’s in company stock, like RSUs or options, you won’t be able to bump up your 401(k) contributions. But you can sell the shares and reinvest the money into a Roth IRA (if you’re eligible) or the humble & easy-to-open taxable brokerage account.

To Splurge (or Not to Splurge)

Before you start thinking of all the wonderful things that money could buy you, take a few minutes to consider these questions, ordered for importance:

• Will I owe extra taxes on this money?
• Are all my credit cards paid off?
• Do I have at least three months of expenses saved in my emergency fund?
• Am I putting at least some of this money aside for retirement?
• Is there a specific goal I’m saving for right now (like buying a house)?

Walk through each of these and put money aside as needed. High-yield savings accounts are great for setting money aside. If you’ve got these covered though, splurge away!

Pro-tip: if you aren’t sure what to splurge on, don’t find a reason. Put the money in your high-yield savings account and wait for the right opportunity.

Don’t Count on It

It might be tempting to start increasing your lifestyle expenses if you’re expecting these payouts regularly. But remember: Stock prices can go down. Bonuses can get clawed back. Jobs can change.

You don’t want to fall into the trap of relying on these payouts to pay your basic living expenses, especially your mortgage or rent. Pro-tip: You should be able to comfortably pay for all your regular living expenses with your regular paycheck.

Many people go into tech for big payouts, and they can be life-changing when you harness them. Need help navigating yours? I help tech workers with taxes and investing around windfalls. Book an introductory call with me today, and let’s make a plan together.