How Kestrel Bay Retirement Advisors plans around one-company stock risk

What counts as a concentrated stock position for a tech family?

Start with the numbers. Hypothetical: Jonah, 46, is a product director at a chip maker and holds options on 30,000 shares at an average $40 strike, 10,000 of them NSOs. His wife Mei is 44, and they have two kids in middle school. At a $70 share price the spread is ($70 − $40) × 30,000 = $900,000. But the options control 30,000 × $70 = $2,100,000 of stock, seven times the couple's $300,000 brokerage account. If the price falls 30% to $49, the spread drops to ($49 − $40) × 30,000 = $270,000. That's a $630,000 loss, the same as a 30% drop on $2.1 million.

In the table, the right-hand column is Jonah after he exercises and sells his 10,000 NSO shares at $70. Look at the last two rows: the loss in a drop shrinks by $210,000, but $300,000 of wage income lands on this year's return ($30 × 10,000).

Count everything tied to one company: vested shares, unexercised options at the full value of the shares they control, unvested RSUs, ESPP shares, and the employer's weight inside the semiconductor and tech funds in the brokerage account. Then add the exposure that never shows on a statement. Jonah's salary and bonus come from the chip maker too, and one rough year for it can shrink his paycheck and his portfolio at once.

Our rule: count in-the-money options at the full value of the shares they control, not at the spread. While the price stays above the strike, each dollar the stock falls costs you as much as owning those shares outright. The common mistake is measuring the position by the $900,000 spread and keeping the brokerage account in semiconductor and tech funds. A 30% drop would then erase $630,000, or 70% of the spread, while the funds fall at the same time.

The firm's tax-first habit shows up before any trade. Before Kestrel Bay Retirement Advisors suggests exercising or selling anything, it estimates the tax that move adds to this year's return and to future years.

Signals that one company now sets your family's risk

A $1 move in the share price changes Jonah's option spread by $30,000 (30,000 options). That's more than many people save in a year, and it happens on an ordinary Tuesday. If a single dollar of movement matters to your yearly budget, one company is already driving your finances.

Timing is the second signal. Once vested options have only two or three years left before they expire, few tax years remain in which to spread the income, and waiting for a better price starts to cost real flexibility. We'd rather map the exercise years early, because a forced exercise in the last year can stack everything onto one return.

Third, you may be an officer subject to blackout windows. Selling may then require a Rule 10b5-1 plan, and for directors and officers its cooling-off period runs 90 to 120 days before the first trade. That delay means the decision has to be made a quarter or more before you want the cash.

The last signal is a spouse holding private shares that can't be sold yet. Mei's early-exercised startup shares are an example. They count on paper, but the liquid part of the household is then even more tied to the public stock, so the sellable shares carry more of the diversification job.

What does a concentrated stock plan not do?

It can't remove the wage tax on an NSO spread. Exercising and selling only chooses the year: Jonah's 10,000 NSO shares add $300,000 of wage income whenever he exercises at $70. A plan also can't decide the ISO exercise question by itself, because that needs a separate AMT projection. And private shares like Mei's may not be sellable at all until a liquidity event. Investing involves risk, including loss of principal.

Embedded gains on shares disappear only through a gift to charity or the basis reset heirs receive when the owner dies. Holding a risky position just to reach either outcome rarely makes sense. Other pages cover those in depth, including donating appreciated stock.

It won't time the stock either. Selling 10,000 shares now gives up the upside on those shares if the price keeps rising. Hedging and exchange funds have their own costs and lockups, so we leave that comparison to its own page.

Yes, reducing the position means paying some tax earlier than you would by waiting. We think that's often worth it, because the tax is known and the drop isn't, but it's a judgment call, and the answer depends on what share of the household's wealth the stock represents.

How does Kestrel Bay Retirement Advisors review a concentrated position over time?

After each earnings window or vest, our team recalculates the stock your household controls (shares × price, options included) and its share of net worth. Each review also compares the tax already realized this year with the year's plan, so the fourth quarter has no surprise income. If Jonah's RSUs vested larger than expected, we see it in the spring, not in December.

You receive a one-page tracker with these items:

From age 61 or 62, sales are also checked against the two-year Medicare IRMAA lookback. The planning itself belongs to a separate page.

• Exposure at the last review and now
• Shares sold since then
• Income realized this year
• The next trading window

Your first conversation with Kestrel Bay Retirement Advisors about one-stock risk

Requests go through the form on kestrelbayretirement.com; the firm doesn't list a phone number. Meetings happen by video or phone, wherever you live in the US. The minimum is $400K in investable assets, and you get the fee schedule in writing ahead of the first meeting.

Bring the option grant list with strikes and expiration dates, brokerage holdings and last year's return. If you're an insider, also bring your company's trading window calendar. We use these to build the first count of what you control and to estimate the tax of the first few moves.

Kestrel Bay Retirement Advisors serves 2,600 clients and manages $910 million for them (figures dated October 5, 2026).