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Engineers Experience Emotions, Too!

The downsizing that’s occurring at Keysight has created a great deal of uncertainty for affected employees. One of the immediate responses voiced by terminated employees was, “I’m going to sell all of my [Keysight] stock!”

This was an emotional response from some very rational, analytical people. Anger was the culprit and a natural human response.

I’ve seen too many engineers and other people make financial mistakes and regrettable decisions made from a place of fear, anger, disappointment or disbelief.

What would be the consequences of selling all of your Keysight stock?

Depending on your income and the amount of stock you owned, it could be quite severe. In many cases, it could put you in the 33%-39.6% Federal tax bracket, and 10.23%-14.63% California tax bracket.

Plus you could owe 3.8% surtax on Net Investment Income, including, but not limited to: interest, dividends, capital gains, rental and royalty income, non-qualified annuities, income from businesses that are passive activities.  Capital gains could also include gains on the sale of your personal residence that exceeds $250,000 per individual or $500,000 per couple.


Let’s look at an example. You have received seven (7) months of pay through the July 21st period. Add in six months of severance pay for a long-time employee. (Together, this equals is a year and one month of earned income).

Then add in other income, such as net rental income (which is very common), exercise of stock options, sales of restricted stock units and any capital gains from your taxable portfolio.

For some Keysight employees and their spouses or partners, this could easily exceed $250,000 or more of taxable income.

With emotions running so high, many feel rushed—and in some cases panicked—to make decisions. This is a lizard brain response—the survival instinct.

Now is the time to step back, look at your overall situation and make only the financial decisions that have to be made, such as:

   ·   Selecting a medical insurance plan upon termination
   ·   Signing up to pay your GUL and long-term care premiums directly from your bank.

All other financial decisions can wait 60-90 days or more.

Many decisions appear obvious, but I’ve been doing this long enough to know that “obvious” isn’t always clear. Many important decisions can be delayed 6-12 months or even two to three years.

Give yourself permission to pause. I do this all the time with my clients.

Take time to get a solid understanding of your situation. This helps slow you down and helps you avoid the regrettable and irrevocable decisions. (This happens all too often when emotions are running high and you feel compelled to act). 

More importantly, a pause gives you time to move back into your logical and analytical brain. When you’re able to focus on your big picture, you can think things through and see which combination of options are best for you in the long run.

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