Questions for an Equity Compensation Advisor: The Edward Jones Investments Checklist

Don't hire on credentials alone: what that cost Glenn at age 65

Hiring the advisor with the strongest general credentials added $5,355.60 to Glenn's Part B premiums in a single year. Glenn is a principal engineer, 57, divorced, with one grown son and 15 years of ESPP purchases (hypothetical, round numbers). He checked titles and asked about investment returns. He never asked how sales would be timed around the year he turns 63.

One advisor's sale schedule put about $370,000 of income into his age-63 year. Medicare uses income from 2 years earlier, so that raises his Part B premium at age 65 for one year under the 2026 table. The advisor wasn't wrong about investing. The advisor just never asked about Medicare.

The better way is to interview with the 8 questions below and listen for specific rules, dates and forms. You're on the right track if the advisor asks for your grant documents before giving any answer. An advisor who answers in the abstract, before seeing a single vesting schedule, is guessing.

Questions for an equity compensation advisor, 1 to 3: unvested RSUs, blackouts and AMT

Start with the grants you can't sell yet. Question 1: how do you count my unvested grants? A good answer treats them as future pay that's forfeited if you leave, not as net worth. A good advisor also asks HR whether the plan speeds up vesting at retirement age, which matters for Glenn, who plans to leave at age 60.

Question 2: how do you work around my trading windows? Listen for the specific quarterly window that opens after earnings. The advisor should also explain that a 10b5-1 plan for most employees now carries a cooling-off period of at least 30 days before the first trade. An advisor who doesn't know about that waiting period hasn't worked with many insiders.

Question 3: what happens to AMT if I exercise ISOs and hold past December 31? The spread between exercise price and market value becomes an AMT adjustment for that year. Selling in the same calendar year avoids that, but turns the gain into ordinary income. A good answer gives you both sides and asks how much cash you have to pay the tax. Every investment can lose value, including the money you put in. If the stock falls after an exercise, you can still owe AMT on a spread that has since disappeared.

Does the advisor know the ESPP 2-year rule and the Form 8949 basis fix?

A capable advisor states the qualifying rule without hesitation: more than 2 years from the offering date and more than 1 year from the purchase date. They also know that a disqualifying sale turns the discount into ordinary income. If they need to look it up in the meeting, keep interviewing.

Question 4: which of my ESPP lots are qualifying today? Glenn has bought every period for 15 years, so his recent lots behave differently from his old ones. A good answer sorts them lot by lot, with dates, instead of treating the account as one pile.

Question 5: how do you catch basis errors? The 1099-B basis can leave out income already reported on your W-2. Left alone, that discount gets taxed a second time. A good advisor adjusts it on Form 8949 using the broker's supplemental statement. Question 6: which lots would you sell first? Listen for specific lot identification, with high-basis and recent lots weighed against qualifying status. A blanket first-in, first-out sale of Glenn's lowest-basis shares is a weak answer, because it maximizes the gain.

Ask about the age-63 Medicare lookback and how the fee is set

Question 7: which future years carry a lookback? A good answer says Medicare Part B and Part D premiums use income from 2 years earlier, so the year Glenn turns 63 sets his premiums at age 65. Marketplace health premiums between age 60 and 65 also depend on that year's income. Ask the advisor to name the years for you.

Here's the arithmetic. Glenn holds $900,000 of ESPP shares with a $200,000 basis, so each $450,000 he sells carries $350,000 of gain ($450,000 × 7/9). He asks 2 advisors how they'd sell after he stops work at age 60. Advisor A sells half at age 61 and half at age 63. Advisor B sells half at age 60 and half at age 62.

A's plan puts about $370,000 of MAGI into the age-63 year ($350,000 gain plus $20,000 other income, with spending funded from sale proceeds). Under the 2026 table that means $649.20 a month instead of $202.90. The gap is $446.30 × 12 = $5,355.60 more for one year, before any Part D surcharge. B's plan keeps the age-63 year clean, though it moves income into years that carry their own costs, so check those too.

The table answers one question: what does a given age-63 income cost at age 65?

Question 8: how are you paid, and does the fee apply to stock you plan to sell? Glenn's $900,000 of ESPP shares will mostly be sold over a few years. Ask whether the fee is charged on that stock while it waits to be sold, and get the answer in writing before any work starts. A weak answer sounds like 'we'll sell it all and diversify right away,' with no word on which tax year or which lots.

Which dates should an equity advisor already have on your calendar?

In calendar order within a year, an equity advisor should know your ESPP purchase dates (often every 6 months; check the plan), the quarterly trading windows after earnings, December 31 for ISO AMT and tax-year sales, the January W-2, the February 1099-B and supplemental statements, and the April 15 filing. Missing any one of them can cost you a tax year.

Glenn's life dates run in a second order: age 59½ (401(k) withdrawals without the 10% penalty), age 60 (the higher catch-up of $11,250 if he still has wages that year), age 63 (the Medicare lookback year), age 65 (Medicare) and age 75 (RMDs start for people born in 1960 or later).

A good advisor asks for these dates in the first meeting. A weak one learns about the blackout after a trade is rejected.

Do the usual answers hold after age 55 or under a 10b5-1 plan?

No. 'Sell the concentrated stock fast' breaks down for people within about 5 years of Medicare, for officers who need pre-clearance, and for people who may leave shares to an heir. Each group has a reason the quick sale can cost more than the risk it removes.

Glenn's sales in his age-63 year cost extra Medicare premiums. Section 16 insiders can trade only through approved windows or plans. Shares held until death get a stepped-up basis, which can change what an heir owes. That last one cuts against selling, so it has to be weighed against the risk of holding.

The rules also moved. Since 2023, 10b5-1 plans carry cooling-off periods. SECURE 2.0 now requires catch-up contributions to be Roth if prior-year FICA wages exceeded $150,000, and it added the $11,250 catch-up at ages 60 to 63.

For plans made earlier, this matters. Glenn's older playbook assumed an $8,000 pre-tax catch-up. As Roth, at an assumed 35% rate, he pays $8,000 × 35% = $2,800 more tax this year, and those dollars come out tax-free later.

Talk it through with the son who'd inherit the shares

An adult child or ex-spouse usually raises the advisor question first, often after a sharp drop in the stock. For Glenn it's his grown son, who is named as beneficiary. Share the 8 questions before the interviews, and ask him to listen for whether each advisor mentions the age-63 year and the stepped-up basis.

Keep the decision Glenn's. The son's role is to check that the answers were specific, not to pick the advisor.

One quick test before you spend anything: if a single equity decision this year (an ISO exercise, a large ESPP sale, a sale schedule near your age-63 year) could change your tax bill by more than an advisor's annual fee, interview advisors now. If not, a one-time review with a tax preparer can come first. If your equity is RSUs you already sell at vest, with no ISOs, no ESPP lots and no big sale coming, an advisor's fee may not be worth it yet, and a tax preparer who checks your Form 8949 may be enough. IRMAA tiers and marketplace rules are reset over time, so check the current figures before acting.

Bring this question to Edward Jones Investments

Ask this: 'Which of my next 6 tax years carry a lookback, and how would you spread my stock sales around them?' Ask Edward Jones Investments to answer it from your grant documents and ESPP lot list, and to show the risk-capacity math (the spending you need from age 60 to 65) before suggesting any sale.