Congratulations on the new job. But before you hand in your notice, there's a short list of financial deadlines worth checking first - because unlike your final paycheck, unvested equity, stock options, and retirement accounts don't wait for you to get around to them. It's the kind of checklist we walk through with clients before they give notice — because the window to act on most of these is shorter than people expect.

Your unvested equity stops the moment you leave

The first thing to understand is that unvested equity doesn't follow you. The day you resign, unvested RSUs are typically forfeited — gone, with no recovery unless accelerated vesting was negotiated in your offer letter. Vested RSUs are yours and require no action — they're already shares you own.

Stock options are more time-sensitive. Whether you have ISOs or NSOs, most plans give you 90 days from your final day to exercise any vested options before they expire back to the company pool. That window is often shorter than people expect, and it starts counting from your last day — not from when you tell HR you're leaving.

Before you give notice, pull your equity grant agreement and confirm exactly what vests, what expires, and on what timeline. This is the single most important financial task before a resignation.

Exercising options before you leave — what to weigh

If you have vested options, the 90-day clock creates pressure to decide quickly. A few things worth understanding before making that call:

NSOs generate ordinary income tax at the moment you exercise — the spread between strike price and current fair market value is taxable immediately, regardless of whether you sell the shares.

ISOs don't trigger ordinary income tax at exercise, but they do create an Alternative Minimum Tax adjustment. Exercising ISOs and holding shares into the new year can result in an AMT bill even if the stock later drops in value.

For private company options specifically, exercising converts liquid cash into illiquid shares with no clear sell mechanism. Modeling the total cash outlay — strike price plus tax liability — before making a decision matters here.

There's no universal right answer on whether to exercise. It depends on your tax situation, your liquidity, your view of the company, and your overall financial picture. When we work through this with clients, we model the total cash outlay — strike price plus tax liability — against their current liquidity and tax bracket before making any recommendation. What's worth avoiding is making the decision by default because the window closed.

Your 401k has more flexibility than most people use

Leaving an old 401k with a former employer is usually the path of least resistance — and often the most expensive option over time, due to limited fund choices and administrative fees that apply to former employees.

The main alternatives:

Rolling to a Traditional IRA gives you the most investment flexibility — essentially anything is available. Rolling to your new employer's 401k keeps things consolidated and, critically, protects your ability to use a Backdoor Roth IRA if that's part of your tax strategy.

That last point matters more than most people realize. If you roll an old 401k into a Traditional IRA, you're creating pre-tax IRA balances that trigger what's called the Pro-Rata Rule. Under this rule, future Backdoor Roth conversions get taxed proportionally across your total IRA balance — eliminating the tax efficiency that makes the strategy valuable. For high earners who use or plan to use Backdoor Roth contributions, rolling directly into a new employer's 401k often makes more sense, even if the fund selection is less ideal.

The one option worth avoiding in almost every case: cashing out. Any distribution before age 59½ is subject to income tax plus a 10% early withdrawal penalty.

A few things people often miss before their last day

HSA vs. FSA: Your Health Savings Account is yours permanently — it moves with you and rolls over indefinitely. Your Healthcare FSA does not. FSA balances typically forfeit on your final day, so use whatever's in there before you leave.

Group life and disability insurance: Both typically end on your last day of employment. If you rely on employer-provided coverage, check whether your policy has a conversion option that lets you move to an individual policy without new underwriting.

Deferred compensation: If you have a Non-Qualified Deferred Compensation plan, resignation often triggers a distribution. Those payments are taxed as ordinary income — and if they land in the same year as a sign-on bonus and an RSU vest from your new employer, the combined income can push you into a significantly higher bracket than you're planning for.

Updating your financial plan for the transition

Job changes tend to create income spikes that catch people off guard. PTO payouts, severance, sign-on bonuses, and vesting events from a new employer can all land in the same tax year, and standard payroll withholding at 22% on supplemental wages often falls well short of what's actually owed.

When evaluating a new offer, it's also worth calculating what unvested equity you're leaving behind versus what a sign-on grant actually replaces. The numbers aren't always as close as they appear in the offer letter.

And regardless of how smooth the transition looks on paper, keeping three to six months of living expenses in accessible cash during a job change protects against payroll timing gaps, clawback provisions on sign-on bonuses, and any unexpected delays in the new role starting.

These are the scenarios we model when a client brings us a job offer — mapping the full-year tax picture before they accept anything.

If your compensation includes equity, a job change is one of the most financially complex events you'll navigate. The decisions made in the weeks around a resignation — on options, rollovers, and tax timing — have consequences that follow you for years. If you're approaching a transition and want to work through the numbers before you hand in your notice, Book a Free 30-Minute Call with Hawk Advisory.

Frequently Asked Questions

What happens to unvested RSUs if I resign?

They are forfeited on your termination date in most cases. Some offer letters include accelerated vesting provisions — check yours before assuming.

How long do I have to exercise stock options after leaving?

The standard post-termination exercise period for ISOs is 90 days. Your Stock Plan Agreement governs the exact timeline — confirm this before resigning.

What's the safest way to move a 401k without triggering taxes?

A direct rollover — where funds transfer trustee-to-trustee — avoids the 20% mandatory withholding that applies to indirect rollovers. Never take the check directly if you want to avoid tax consequences.

Does rolling my 401k to an IRA affect my Backdoor Roth strategy?

Yes. Pre-tax IRA balances created by a 401k rollover trigger the Pro-Rata Rule, which taxes future Backdoor Roth conversions proportionally. If you use this strategy, rolling into a new employer's 401k is usually the better option.

This article is for educational purposes only and does not constitute personalized financial, tax, or legal advice. Please consult a qualified professional for guidance specific to your situation.