How Do Restricted Stock Units (RSUs) work at Google?

Alphabet Restricted Stock Units are also referred to as GSUs (Google Stock Units). The company does allow for shares to be withheld to cover taxes (sell to cover) as a means of helping employees pay the taxes at vesting.

What is Google's RSU Vesting Schedule?

Most clients we’ve seen at Google have vesting schedules that operate under the “4 year schedule/1 cliff” time table. Meaning 25% of your RSUs will vest after one year from grant date. The rest will vest on a quarterly schedule over the following 3 years. So, if you stay at the company all 4 years after the grant date, you will see all your RSUs vest and as a result you will own those Google Stock moving forward.

Reviewing Your GSU Statement:

Making Sense of Your GSU Snapshot

Understanding Your 401(k) & IRA Retirement Savings Plans at Google

The Google 401(k) plan allows for contributions in three ways; as Traditional 401(k) contributions, as Roth 401(k) contributions or non-Roth after-tax contributions.

Breaking Down The Tax Treatment of Each Contribution Option:

Google 401(k) Match & Automatic Enrollment:

All US Google employees are automatically enrolled in the Traditional 401(k) with a 50% up to 3% match and invested in a target date fund.

Contribution Limits For Your Google 401(k):

The IRS imposes limits on the money that you can contribute to your 401(k). 

Your contributions to the Traditional (Pre-Tax ) and the Roth accounts cannot exceed $23,000 per year combined.

For example, you can contribute $23,000 Traditional to your Google 401(k) or $23,000 to your Roth 401(k), or $10,000 to the Traditional and $13,000 to the Roth, but the aggregate can be no more than $23,000 . 

Helpful tip: if you moved to Google midway through the year, your contributions at your previous firm count as part of this $23,000 so it’s important to include those figures in determining your eligibility.

After-Tax Contributions at Google:

Google also has an After-Tax 401(k) that you can contribute money into ON TOP OF the $23,000 that we’ve already discussed. 

The IRS allows you (as a Google employee) to contribute a maximum of $69,000 to your 401(k) across all contribution types. This includes: Traditional (Pre-tax) + Roth contributions, + Google 401(k) match + the After-Tax portion.

(Important reminder: an After-Tax 401(k) is separate and different from contributing to the Roth 401(k) as we’ve described it above.)

Mega Backdoor Roth IRA at Google

Here’s why we LOVE Google’s plan & in particular what you can do to maximize it. 

You can do what is called an in-plan conversion and convert these After-Tax dollars into the actual Roth 401(k) plan (a tax-free maneuver).

Then these funds won’t just grow tax-deferred, those earnings will also be tax-free when you take the money out in retirement (just like all other Roth accounts!) 

This creates a unique planning opportunity for high income earners. Book a Right Fit call with our team to learn more.

Frequently asked questions:

401(k) Saving & Goal Mapping: 

Setting your participation amounts needs to be coordinated with your entire financial outlook and done so in a way that addresses your immediate & short-term financial goals.

How much you should be saving into your retirement accounts cannot be done in a vacuum!

You must first address important questions such as,

• Are you saving up for a house in 3 years and need help building your down payment to get there?
• Are your kids planning on going to private school in 3 years?
• Are you planning on retiring before you can access these funds at full retirement age (59.5)?

These are the sort of questions we seek to address as we design your Financial Life Plan®.

 If you need help mapping out your immediate, short term and long-term goals and savings plan, book your “Right Fit” introductory call today.

Want to learn more?

To learn more about RSUs are and how they work, read here.

To get started on designing your financial road map, Book Your "Right Fit" Call now.

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*Information is provided for educational purposes only and does not constitute a recommendation. All data is derived from sources deemed reliable. Our firm is not affiliated with Google or any other company referenced on this website. We work with individual employees from these organizations and have developed an expertise in supporting their unique financial needs and work benefits. References to these companies are for informational purposes only to indicate our familiarity with financial planning considerations common among employees in these industries.