Hi, I’m 54, debt free other then my mortgage and I have $24,000 in a 457b retirement plan. I put deferred compensation into it on an after-tax basis. I got a late start on this but I’m currently saving 15% of my income. I also have 29 shares of Apple stock in an E-trade account that I acquired in 2016 when I worked for them for a few years. My question is, should I cash out the Apple stock and put it into my retirement plan or hang onto it? I’m not really sure what to do with it so that it will benefit me the most for retirement. Please excuse my ignorance as this is all new to me.
Hey Cheryl,
Thanks for posting. Although Apple has kicked butt during the last decade, there is not guarantee that it will do so in the coming years. You are better off selling the majority of your shares and invest that money in a lost cost index fund (either one that mimics the total stock market or the S&P 500). If you want, you can keep 10% in Apple as play money: if Apple continues to do well, you share in the gains, if it tanks, you don’t lose a good chunk of money. I hope this helps!
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Hey @Ccoe!
I agree with @Freeney!
I might add that since it’s in a taxable account, you will want to be aware that selling your Apple stock at a gain will likely be a taxable event and you’ll owe long term capital gains tax on the profit from the sale. So it might be worth considering your tax situation when deciding when to sell. You’ll be responsible for those gains some day so it’s not a terrible thing to get the taxes paid now, especially if you can move the proceeds to a tax-advantaged account. Since you have about $10K in Apple stock, you could live on that for a while, and put most/all of your income into the 457 to get more of your money in the tax advantaged account. Tax issues are often worth running by a tax professional.
@Jeremy @Freeney Thank you so much for your reply and great advice. Jeremy, I found you on instagram a few months back and I’ve already learned so much. Thanks for sharing your knowledge!
I wanted to share a similar personal experience with you and everyone else. It was both to my disappointment and valuable learning experience that I’m actively processing… Perhaps we can both grow our wisdom here?
I took a gamble in my early 20s (2013ish) while I was living with my parents and bought about $20,000 worth of AMD stock for about $3.somthing. That was all my savings. I had my logic on the value I saw in AMD, but I don’t want to digress too much. I also sold my NVIDIA, Autodesk, and Adobe shares because I just wanted to secure profits around this time too while thinking that was where they’d plateau. Look where those companies are today? I kick myself for doing that.
Anyways I had a similar question a few months ago when AMD hit an all time high around $55. I was encouraged to diversify, lock gains, and I started questioning the company’s ability to continue growing. I sold about half my shares and now it’s hovering around $80. It burns a little to be honest, but I am diversifying my portfolio and I’m not out of AMD completely. I’ve since added Index funds and continue looking to add more as time goes. I’m now motivated to max out my 401K in effort to grow my tax-advantage accounts rather than investing more in the stock market.
Now this is just my two cents, but I feel Apple will remain a strong company in the years to come. Although I have to admit my bias as someone who works in the technology sector. I’m bullish for its potential and the yet to be seen opportunities come to fruition. While Apple may appear complacent, I doubt this is where things begin to wane. Many of these companies are working on things behind the scenes that not only serve themselves, but are also enablers of other technologies and societal functions.
My two cents.