Financial Planning for Stock Options

Balancing Cash Flow with Investment Opportunity

A financial plan can help you understand what stock option opportunities to take and when to take them.


Joanna Carter* came to us looking for help with her finances. At 48 years old, she was recently promoted to a demanding job as the Chief Scientific Officer for Newland Biotech. She had been managing her own money since her divorce 5 years ago, but the dramatic increase in Newland’s stock price over the last year has increased the value of her stock options to the point where she felt a little overwhelmed. She was worried about making a mistake, but she also felt so disorganized in her personal finances she didn’t know where to start. She came to us for financial planning for stock options, but to give her the best financial planning advice, we needed to look deeper. After speaking with her more, we understood the full spectrum of her financial concerns, pressures and goals. 

Financial Planning for the Sandwich Generation


Joanna is in a common ‘sandwich generation’ position. Her 78 year old mother lives several hours away. She was beginning to have trouble living independently in her home since Joanna’s dad had passed away last year. Her mother has Social Security and a small pension along with some home equity, but she doesn’t have long term care insurance.

Joanna knew she needed to have a conversation with her siblings and her mom to make some decisions on living arrangements, either hiring an aide or considering an assisted living facility. She felt an obligation as the sibling with the most financial resources to help her mom, but Joanna also wanted to make sure her own financial situation is secure.

Financial planning for stock options means balancing growth opportunities with cash flow needs.


Joanna’s daughter is a sophomore biology major at a private college on the east coast, where she is excelling in her studies. She wants to study abroad for a year and has aspirations to go to medical school. Joanna’s ex-husband is not in a financial position to help with these costs, so Joanna bears the full cost of education and support for her daughter.

Financial Planning for Stock Options


Joanna loves her job and feels the company has a great future with products in their pipeline and a solid management team in place. She had not exercised any of her stock options and had not sold any of the Restricted Stock Units (RSU) that were being granted twice a year. She also had company stock in her 401(k) and participates in the Employee Stock Purchase Plan (ESPP) since it offers a generous 15% discount and a one year look back period.

She hadn’t really thought about retirement until recently when her mom started having some issues, both medical and financial. Joanna was starting to wonder if she was on track to retire and was also concerned she may have to help her mom financially. She worried about how increasing responsibility for her mom may impact her career since she spent a lot of the last year traveling to visit her mom.

She has been maxing out her 401(k) every year since her divorce to make up for having to split the account with her ex-husband as part of their divorce agreement. She paid her bills every month, but felt a bit of a cash flow crunch despite her 6-figure salary, hefty bonuses, and stock grants.

Issues and Concerns

  • concentrated stock position
  • cash flow
  • increasing demands for money
  • she makes good money so where is it going?

Financial Plan Goals


Financial Decisions and Responsibilities


Joanna felt overwhelmed by her increasing complex situation. The value of her stock options and shares have greatly increased and as the CSO, she was now considered an insider and subject to trading restrictions. She doesn’t want to sell any of the stock but she doesn’t want to look back later and feel like she made a mistake. If she sold some stock, she wouldn’t know what to do with the money.

Joanna wants to provide everything for her daughter, but is conflicted. Joanna put herself through college (undergrad and graduate school) by working and taking out loans, and felt this experience, while difficult at times, made her stronger and more determined to succeed. Her daughter doesn’t know about the value of the stock.

She would like to have her mom closer so they could spend more time together. She wanted to know how much money for care her mother may need and how much she can provide on a monthly basis to help her mom.

Personal Goals and Dreams


When asked about goals and dreams for herself, Joanna had to think for a while. She was so used to thinking about finances in terms of things she had to get done and decisions she had to make that it takes a while to discover she would love to travel and learn new languages in retirement. It was her dream to live in Europe part of the year. She also wanted to have peace of mind about her finances so that she can focus on her career and her family, knowing that someone is watching out for her and has her best interests at heart.

Scenario Based Financial Planning

Changing only one variable will likely have a significant impact on Joanna’s lifestyle or fall short of the goals that are important to her. We presented a sample scenario showing an example of how she could combine all of these variables to find the balance that was right for her.

Sound financial advice and investment

management can keep you on track to the

retirement of your dreams.


A good financial planner helps you organize all your financial details into a focused and clear picture. A great financial planner looks at your finances and life values as a whole, incorporating what’s important to you in your financial decisions. 


You want a financial advisor who understands your goals and dreams, but also knows what keeps you up at night. An expert and experienced financial team can present unique solutions, see new or different opportunities, and simplify your financial life.

Talk to a Financial Planner

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*This case study is intended to be educational and should not be considered or construed as legal, accounting (tax), or financial planning advice. The strategies described may not be suitable for all individuals. Examples are provided for illustrative purposes only, and no representation is made that a person acting on these examples will achieve the results shown.

This is an example of possible solutions to a given situation and should not be taken as advice or recommendations for your unique set of conditions. We invite you to visit our office for a free consultation to tell us your specific concerns and goals.

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.


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