Your IBM Legacy
MAXIMIZED
Hilltop Wealth Advisors specializes in helping employees of IBM—and other companies in the Triangle—capitalize on their benefits to maximize their income.
We’re here to help you better understand the benefits you may be receiving from IBM and leverage financial opportunities to build your portfolio, make strategic investments, save, and reduce taxes.
Learn more through a complimentary consultation with a Hilltop Advisor.
IBM BENEFITS +
Opportunities
Learn about your possible company benefits and
discover financial opportunities that could await you.
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Stock options (incentive stock options, or ISOs, and non-qualified stock options, or NSOs) are a type of equity award that can be made available to certain employees. If eligible, you will be given a set number of options. Once they vest, you can exercise the options, purchasing shares of IBM stock at a predetermined price. For ISOs: you can qualify for preferential tax treatment upon selling shares if you held them for at least one year from the exercise date and two years from the original grant date.
OPPORTUNITIES:
Stock options can present an opportunity to purchase company stock at a discount, with the potential of minimizing income taxes owed on that discount. Over time, the value of your shares can build up. Be sure to review your concentration risk and have a plan for exercising valuable options. Utilizing a 10b5-1 plan to exercise options strategically based on their inherent leverage, tax impact and insight ratio is an important step in maximizing their benefit.
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If you are enrolled in a High Deductible Health Plan, then you have access to a Health Savings Account. IBM will make a contribution to this account and you can make additional, tax-deductible contributions up to the annual limit. The earnings in this account are tax-deferred, and the withdrawals are tax-free if you use the funds for qualified medical expenses.
OPPORTUNITIES:
With an HSA, you do not have to deplete the account by the end of the calendar year. Instead, you could focus on building up the balance and investing it to take advantage of long-term market performance, and use the funds for future medical expenses. You can also take an HSA distribution at any point to reimburse yourself for previous medical expenses, if those expenses were incurred after the HSA was first opened.
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This “defined benefit” retirement plan is funded entirely by IBM and does not allow for employee contributions. IBM automatically contributed 5% of you salary to the RBA. The RBA will accrue interest each year, generally tracking the yield of 10-year Treasure Bonds.
OPPORTUNITIES:
Since you can’t control how the RBA is invested, you may want to consider the overall allocation of all your IBM retirement plans, with the RBA being part of the fixed-income/conservative piece of your portfolio.
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The 401k Plus Plan has a variety of investment options, and allows you to make several different types of contributions: pre-tax, Roth, and after-tax. With pre-tax and Roth contributions, you are subject to the annual salary deferral limit. After-tax contributions have a different, high contribution limit. The plan allows for automatic in-plan conversions of after-tax contributions to the Roth side of the 401k.
OPPORTUNITIES:
If you have reached the salary deferral limit for your 401k contributions, the “mega backdoor Roth” strategy can be an effective way to save more, tax-free, for retirement. To do this, you make after-tax contributions to the 401k and then complete an in-plan conversion. This will move the after-tax contributions to the Roth side of the 401k, where the funds can be invested and grow tax-free.
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The Employee Stock Purchase Plan gives you the option to purchase IBM stock at a discount. You can contribute a portion of your compensation, up to a limit, to purchase these shares. You can sell the shares at any point, if the sale is a “qualifying disposition”— you can receive preferential tax treatment.
OPPORTUNITIES:
The ESPP offers a guaranteed discount on the stock purchase, which can be an opportunity to maximize investment returns. As with any employer program, you’ll want to monitor the total amount of company stock you own, because it’s important to stay diversified. Over time, the value of your shares can build up. Be sure to review your concentration risk. Selling high basis shares and gifting low basis shares often helps to reduce the tax impact. Utilizing stock gifts to a donor advised fund or endowment can also help offset high income tax years while funding gifts to your favorite charities many years into the future.
Hilltop
Executive
Advantage
Hilltop Wealth Advisors specializes in retirement and wealth strategies designed for IBM executives like you.
See how we can help you leverage your company benefits to maximize your financial legacy.
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Risk-managed portfolio design—inside and outside of your retirement plan—helping you to work towards your wealth goals.
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Comprehensive tax projections. Social Security timing and charitable giving strategies to chart a future worth planning for.
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Guidance on HSA investing, Medicare integration, and retiree medical plan coverage with the Cisco Retiree Medical Access Plan.
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Strategies for efficient distributions, Roth conversions, and tax-smart withdrawal sequencing.
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Strategies for efficient distributions, Roth conversions, and tax-smart withdrawal sequencing.
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Beneficiary reviews, trust coordination, and multi-generational planning in coordination with your estate attorney.
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Experienced guidance on managing concentrated Cisco equity positions and equity compensation (restricted stock and employee purchase plans).
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Leverage charitable giving tools to maximize your impact and optimize IBM’s 1:1 gift match (up to $10,000).
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Planning for dependents, special needs and succession—so your wealth serves your family for generations to come.
Get STARTED.
Use the calendar to book a complimentary consultation with a Hilltop Wealth Advisor or give us a call.
Phone
919-401-1500
HOURS
M-F, 8AM-5pm (ET)
Have equity compensation?
Make wise decisions about one of your most valuable assets with Hilltop’s Equity Compensation Analysis. Designed to provide you with unique and insightful perspectives on the full value of your equity, its inherent risk, and the hidden leverage often overlooked in your stock options to help you reach your financial goals.
Disclosure: Hilltop Wealth Advisors is a registered investment adviser. Registration does not imply a certain level of skill or training. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance. Hilltop Wealth Advisors is not an accountant or attorney and does not provide tax or legal advice. Hilltop Wealth Advisors and IBM are under separate ownership. Although the firm does not charge a fee for the initial complimentary consultation, it is intended to result in the attendee establishing an advisory relationship with the firm. Hilltop Wealth Advisors is not endorsed by IBM or its affiliates.