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Net Unrealized Appreciation Rules (NUA)

Financial Advisor Boston AIF®, CRPS®, AWMA®, CFS®, APMA®
  • If you own employer stock in your employer’s retirement plan, and if that stock has appreciated when you retire or leave your company, you should be aware of Net Unrealized Appreciation Rules (NUA).
  • NUA allows individuals to take a withdrawal from their stock holdings as a capital gain, as opposed to income.
  • For example, say you own employer stock for which you paid $50,000, and today it is worth $250,000.
  • If you use NUA, on the $50,000 you will pay income taxes, but on the $200,000 you will pay capital gains taxes, which are 15% to 20% below income tax rates for most people.
  • The $200,000 is your NUA.  It will fluctuate as the stock moves up and down.
  • NUA is an important option.  It can reduce taxes, but it may concentrate risk during retirement when diversification is needed.

I have over thirty years experience helping individuals get the most from their retirement accounts.

Read more: Investing on Your Own Isn’t Always Best for You

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