When Your Career and Portfolio Are the Same Bet (Part I)

Managing RSUs and Concentrated Stock Risk in Your 50s

For many technology professionals, equity compensation has been a powerful wealth-building tool. RSUs, stock options, and long-term appreciation have rewarded patience, loyalty, and calculated risk-taking, often very well.

The challenge is that the same strategy that created wealth can quietly become the largest risk as retirement approaches.

By the time many professionals reach their 50s, their income, career, and investment portfolio may all depend on the same company or sector. On paper, this looks like success. In practice, it creates a level of concentration that deserves closer attention.

How Concentration Builds Without Being Obvious

Concentration risk rarely comes from a single decision. It accumulates gradually over time:

• Salary and bonuses tied to one employer
• RSUs vesting year after year
• Company stock retained rather than sold
• Index funds tilted heavily toward the same sector
• Career prospects dependent on industry cycles

Each layer makes sense on its own. Together, they can turn a diversified-looking balance sheet into a single dominant exposure.

This is not a mistake, it’s often a byproduct of professional success.

Why Concentration Becomes Riskier in Your 50s

Earlier in your career, concentration can work in your favor. Time, future earnings, and flexibility help absorb volatility.

As retirement draws closer, the dynamics change:

• Human capital declines — fewer working years remain
• Re-employment risk increases — especially during sector downturns
• Portfolio size peaks — losses now matter more in absolute dollars
• Recovery time shortens — both financially and emotionally

In technology and other cyclical industries, market downturns often coincide with hiring slowdowns or layoffs. When portfolio values and income decline at the same time, the impact is amplified.

This is more than market risk, it’s correlation risk between your career and your capital.

RSUs Are Income First, Investments Second

One common misconception is treating RSUs like traditional long-term investments.

In reality, RSUs are:

• Deferred compensation
• Highly correlated to your employer
• Concentrated by design

Holding RSUs indefinitely is an active decision, even when it feels passive.

The key question isn’t whether your company will succeed long-term. It’s whether your retirement security should depend on a single outcome.

The Emotional Side of Concentration

Selling company stock is rarely just a financial decision. Loyalty, optimism, familiarity, and pride all play a role. Taxes and regret aversion (“What if it keeps going up?”) often complicate things further.

Thoughtful planning respects these emotions, but doesn’t allow them to silently dictate risk exposure.

Reducing concentration doesn’t require abandoning belief in your company. It requires aligning your exposure with your current life stage.

The Right Question to Ask

Instead of asking, “Should I sell my RSUs?” a more useful question is:

How much of my future retirement security depends on one company or one sector continuing to perform well?

If the answer is “a lot,” it may be time to introduce where inertia once worked.

Recognizing concentration risk is often the first step toward broader pre-retirement planning. Once it’s acknowledged, questions around portfolio structure, diversification, and risk management naturally follow.