benforthelord
New member
Looking for help to determine whether to keep holding company awarded RSUs, or cash them in to invest the money using my TSFA.
Background:
So here's the reason for my question. Given that my base salary is $242K CAD per year I am put into the highest tax bracket if cashing in the RSUs. What is the financially prudent thing to do here? Am I better off taking the tax hit and cashing the stock in right now and then reinvesting it in my TSFA to shelter further earnings? Or am I better off just leaving the stock where it is and cashing it in later in life when I am in a much lower tax bracket.
Some additional important info that may be needed:
1) I live in Ontario;
2) I only buy VGRO.TO in my TSFA;
3) I am planning on $100K of annual retirement income when I retire at 65; and
4) I am currently 42 years old
Thank you for taking the time to read and offer any advice.
Background:
- In 2022 I was granted RSUs in the amount of $18K USD. Vestment happens over 3 years, 1/3 each year.
- Yesterday I was granted more RSUs, this time $51K USD. Same vestment schedule.
- Based on my experience with the first 1/3 vestment back in October, 55% of the vested stock was withheld by the United States for taxes.....so I only received 45% of the stock. The full amount of the vestment was then reported as income.....which I then paid income tax on (holy taxes Batman!)
- I did not cash the stock in. The stock has nearly doubled since the vestment date. If I sell the stock I will then pay capital gains on any gains the stock made since the day it vested. I understand capital gains tax means 50% what the stock made gets tacked onto my income and I pay income tax on that additional income.
So here's the reason for my question. Given that my base salary is $242K CAD per year I am put into the highest tax bracket if cashing in the RSUs. What is the financially prudent thing to do here? Am I better off taking the tax hit and cashing the stock in right now and then reinvesting it in my TSFA to shelter further earnings? Or am I better off just leaving the stock where it is and cashing it in later in life when I am in a much lower tax bracket.
Some additional important info that may be needed:
1) I live in Ontario;
2) I only buy VGRO.TO in my TSFA;
3) I am planning on $100K of annual retirement income when I retire at 65; and
4) I am currently 42 years old
Thank you for taking the time to read and offer any advice.