Unwinding $1.6M of concentrated RSU stock without a tax shock

A Seattle Group PM with half his net worth in his employer's stock, a six-figure capital gains worry, and the 18-month plan that finally moved him.

The situation

Eli is 42, a Group Product Manager at a large enterprise software company in Seattle. His total comp lands around $480K - base, bonus, and a steady drumbeat of RSUs that vest quarterly. After eight years at the company, more than half of his liquid net worth, about $1.6 million, sits in a single stock ticker. The rest is parked in a HYSA earning a respectable rate, and a 401(k) that's been on autopilot for years.

He's not careless. He knows the concentration is high. He's said the words "I should diversify" in roughly every quarterly conversation he's had with his accountant. But every time he runs the numbers, the prospect of a six-figure capital gains bill stops him in his tracks. So he keeps holding. And the position keeps growing.

The gap we found

There was no plan for how to diversify - only the vague intention. Each new vest was being treated as a separate event instead of part of a multi-year strategy. He had years of long-term lots at sharply different cost bases sitting alongside each other, and no one had ever sorted them. The mega-backdoor Roth feature in his 401(k) was switched off. A Direct Indexed account that could absorb the diversification and harvest losses around it didn't exist. The pieces were there. The integration wasn't.

What we did

The first move was the easiest one, and the one with the highest immediate value: sell every new RSU at vest. Because vesting is taxed as ordinary income, selling immediately means the capital gain on that lot is essentially zero. We turned that into a standing instruction. New vests no longer add to the concentration; they get redeployed.

Then we sorted his existing position into specific tax lots and built an 18-month unwind plan. Each quarter we'd sell the highest-cost-basis lots first to keep gains contained, harvest losses in his other holdings to offset what gains we did realize, and feed the proceeds into a Direct Indexed S&P 500 portfolio. The Direct Index machinery now runs continuously in the background, it owns hundreds of individual stocks, harvests losses across them, and keeps tracking the index within tight bounds.

We also turned on the mega-backdoor Roth in his 401(k) — another $34K a year of after-tax-to-Roth space he hadn't been using. We replaced his HYSA with a Washington-friendly Treasury and muni ladder yielding meaningfully more after tax. And we ran the standard foundation pass: revocable trust, beneficiary alignment, umbrella policy review, and an automated quarterly estimated tax cadence so the surprise checks at filing time stop happening. Alphanso's AI agents pull his payroll and vesting activity directly so the estimates stay accurate as comp shifts.

The result

Concentrated stock cut from $1.6M to $380K over 18 months — without a tax shock
Effective tax rate dropped from 34% to 26% in year one
$34K/year of new Roth space activated through the mega-backdoor
Standing "sell at vest" rule means the concentration won't rebuild

Why this worked

The real diversification problem isn't "what should I buy with the proceeds?" It's "how do I get out of the position without writing a check I can't stomach?" Once you sort the lots, harvest the offsets, and put a standing rule on new vests, the answer turns out to be unglamorous and entirely doable. Alphanso's flat fee meant we were paid to do the sorting work, not to keep the assets. And the Direct Indexing layer means the diversified portfolio is itself a tax-loss-harvesting machine that keeps paying dividends - quietly, every year.

If half your net worth is in your employer's stock and you've been saying "I should diversify" for two years, request a callback and we'll show you the unwind plan.

This case study is a composite illustration based on real Alphanso client scenarios. Names and identifying details have been changed for privacy. Results are not guaranteed and will vary based on individual circumstances. All investing involves risk, including the possible loss of principal. Alphanso LLC is a registered investment adviser.