Once again I used TurboTax.

I still believe that if you are smart enough to work in big tech you are smart enough to do your own taxes. For the average W2 FAANG worker, their taxes are simply not that complex. Sure, the numbers can get big, but that doesn’t mean the complexity increases. (Just be aware of the common gotchas).

That said, I’ve moved on from the idea that everyone should do their own taxes. If throwing money at the problem gives you back time and peace of mind, that is a perfectly rational trade. I just hate when I see fear mongering that you need a professional.

But this is 2026, so we need to talk about AI.

Is next year the year AI does my taxes and I stop using TurboTax?

I put the question to LinkedIn and here are the results.

Most of you think I’ll use TurboTax again. But an AI tax preparer is honestly not as far off as I expected. On Threads, TurboTax held up about the same, but AI pulled much further ahead of the CPA crowd.

Reflecting on my own experience this year, I did not use AI to file my taxes, but it replaced more than 90% of my Google queries. Instead of getting pulled into IRS PDFs, forum rabbit holes, blog posts, and tax subreddits, I used Gemini and ChatGPT to work through the arcane edge cases.

But next year?

I have a few predictions.

Prediction 1: TurboTax pulls an AI rabbit out of their hat

Inertia is a hell of a thing. When something has mostly worked, the default is to keep doing it. So the default is that I stick with TurboTax.

But this year made something very clear: instead of relying on Google searches, forum rabbit holes, and TurboTax support threads, I relied on AI whenever I got stuck. That creates both a huge risk and a huge opportunity for TurboTax.

Why should I need a third-party AI tool hovering over my browser when TurboTax could build this directly into the product? They’ve already been investing here with Intuit Assist and have now gone even further with OpenAI. (Though I couldn't benefit from it this year; I still use their desktop software, which somehow lacks basic 1099 importing functionality.)

That is the real question. TurboTax has the trust, the accuracy checks, the distribution, and the existing workflow. The question is whether they are willing to disrupt their own model, especially when so much of the current value prop comes from upselling live help.

I know there are a lot of smart people at Intuit thinking about this already and a team with a fun AI first code name tackling what “AI FIRST TAX” looks like. The question is whether they can move fast enough to surprise me by next tax season.

The biggest issue with AI and taxes is trust. If TurboTax can integrate AI in a way that feels native and trustworthy, they have a massive advantage over random AI tax startups asking you to upload your Social Security number, your spouse’s Social Security number, your kids’ Social Security numbers, and the rest of your most sensitive financial data.

That is why I think this is still TurboTax’s game to lose.

Prediction 2: AI Tax Review Tools Explode

Even if you do not use an AI tax preparer next year, I am extremely confident that most of the FAANG FIRE audience will end up using some form of AI-driven tax review. So even if you are not relying on AI to take all your forms and complete your return, you may still use it to review the output from TurboTax or whatever software you use and check for mistakes.

This is basically a code review exercise, which is something AI should be pretty good at. It also feels extremely solvable.

There are a handful of gotchas in FAANG employees’ taxes where AI could catch huge issues almost immediately:

• Hey, those RSUs you uploaded have a $0 cost basis; this is probably wrong.

• Hey, it looks like you added ESPPs but you didn’t make any adjustments.

• Hey, it looks like you did a backdoor Roth, but you entered it wrong and you got taxed on the entire amount.

I already have very specific ways people can check these manually, but that still requires them to go digging through their tax forms. If they can just upload everything to a tool and have it flag the obvious issues, boom, you have either saved them thousands of dollars or caught a costly mistake before they file.

I wish TurboTax did this natively, but whether it comes from TurboTax or not, I think a huge percentage of you will be using tools like this next year to review your return. And once people get comfortable using AI for review, it becomes a lot easier to imagine them trusting a full AI filing solution after that.

Prediction 3: None of This Should Exist

Think about how much mental energy, engineering talent, and startup money is being poured into AI taxes right now. None of this should even exist.

The government already has most of the data. Your W-2s. Your 1099s. Your brokerage forms. For most people, the correct system is obvious: send them a completed or near-completed return, let them review it, make any edits, and be done.

Instead, we created an entire industry around forcing people to rebuild their financial life from scratch every April. And now we are throwing AI at a problem that never should have existed in the first place.

/rant

A few quick hits that are top of mind:

• If you are married and earn >$1.5M in California, you should look into whether it makes sense to file as 'married filing separately' instead of 'jointly'. I know multiple households who made the switch, saving themselves upwards of $10k.

  

• If you were shocked by your tax bill, you should understand what caused it and why it might not be a big deal.

• If you left California or New York and don’t understand why they are still taxing you…

Yeah… that does not exactly roll off the tongue.
So for now, let’s just call it: The 3-75 Rule

The 3-75 Rule:

If there is at least a 75% chance you will need the money within the next 3 years, that money should not be invested in stocks.

It can apply to any large purchase, but I use it most often with coaching clients who are considering buying a home.

Today’s newsletter is sponsored by Wealthfront.

Doing my taxes and seeing how much interest my cash generated last year was a good reminder that this stuff adds up. It reinforced why Wealthfront is a core part of my 2026 goal to simplify my financial life.

My high-yield Cash Account at Wealthfront has consistently provided access to one of the highest APYs I’ve seen along with up to $8M in FDIC insurance through program banks.

Right now for a limited time, Wealthfront is offering my audience an exclusive 0.75% APY boost for three months on up to $150,000, for a total 4.05% variable APY when you open your first Cash Account using my link. Go to wealthfront.com/andre. Base APY is 3.30% as of 1/30/26, is provided by program banks, and is subject to change. Promotional terms and conditions apply. See our affiliate link for more details.

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The Core Framework

Ask yourself if you are 75% confident that you will make the purchase (like buying a house) in less than 3 years.

• If you are less than 75% confident: You should keep investing your excess cash beyond your emergency fund in equities rather than sitting on it.

• If you are at least 75% confident: That is the trigger to start being realistic, pull back your equity exposure, and build up a cash position for the down payment. At this stage, you shouldn’t keep those funds exposed to potential 20% market drops.

The Standard 5-Year Trap

Traditional financial advice often uses a five-year timeframe. If you’re going to need money in the short term, it should not be exposed to stock market volatility.

But in cities like San Francisco, New York, Seattle… I have seen so many people fall into the trap of “we’re going to buy a house in 5 years“.

It becomes a nebulous rolling timeline of you saying “5 more years, 5 more years, 5 more years”. Next thing you know it has been 15 years and y’all are still saying “we’re going to buy a house in 5 years”.

The trap here is that you have been leaving your excess cash uninvested this entire time!

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The 3-75 Rule is supposed to challenge you. Are you really planning on buying a house? I want to force you to be honest with yourself.

Why 3 Years?

In 2026, five years feels like an eternity. It is just too far away to be useful.

Three years feels different. It feels close enough that I can be directionally right.

I’ve been using a personal three-year rule for bigger life decisions for a while now, from my career to where I want to live to school decisions for my daughter.

I am writing this right now in March 2026. That means I want to really think about whether you are going to buy that house any time between now and March 2029.

Try imagining your life in March 2029.

I can personally picture my daughter finishing her final months of 5th grade. As I extend my vision out into 2030… everything gets fuzzy!

How old will you be? How old will your kids be? What grades will they be in? Will you still be working the same job? Will you be itching to live somewhere else?

The 3-75 Rule is really just the financial version of that broader idea.

The 75% Confidence Threshold

There is nothing magical about 75%.The point is forcing yourself to put a number on the decision.

Sitting on cash for a year or two is fine. If you do not end up using it, sure, it probably would have been better off invested. But over a short stretch, that usually is not going to make or break your plans.

The real problem is when that cash drag quietly stretches into 10 years.

That is why the 75% threshold matters. It forces you to be honest with yourself. Are you actually likely to buy within 3 years, or are you just using a future purchase to justify holding more cash than your investment philosophy would otherwise support?

That is the real question: Are you at least 75% sure you are going to do this within 3 years?

Is there a deeper reason you are sitting on that cash?

I really want to push people on this whenever they’re saving for bigger purchases.

Are you actually 75% sure you’re going to go through with it in the next 3 years? Or has that future purchase become a stand-in for something else?

Because sometimes the cash is not really about the house. Sometimes it is about wanting flexibility. Wanting optionality. Wanting to feel safe in a world that feels uncertain.

And to be clear, there is nothing wrong with that.

There is nothing wrong with being more conservative. There is nothing wrong with holding more cash. There is nothing wrong with wanting a bigger safety net.

But be honest about what that cash is doing for you.

If it is truly for a near-term purchase, great. Call it that.

If it is really there because it helps you feel more secure, that is fine too. Call it an expanded emergency fund. Write down the number that actually makes you feel safe, whether that is six months, twelve months, or something else entirely. Then invest the rest with confidence.

Because over the next 5, 10, 15, or 30+ years, what matters most is not whether you perfectly timed one future home purchase. It is whether you built the habit of consistently investing your excess cash instead of leaving it on the sidelines because maybe, possibly, someday, you might need it.

That’s the FAANG FIRE 3-75 Rule. Tell me what you think in the comments!

Disclosures:
Andre Nader is a Wealthfront client and was compensated ~$3,330 for the testimonial and promotion of the Wealthfront Cash Account. This compensation creates a conflict of interest. Experiences may vary among Cash Account clients, and results are not guaranteed.

The Cash Account, which is not a deposit account, is offered by Wealthfront Brokerage LLC (”Wealthfront Brokerage”), Member FINRA/SIPC. Wealthfront Brokerage is not a bank. The Annual Percentage Yield (”APY”) on cash deposits as of January 30, 2026, is representative, requires no minimum, and may change at any time. The APY reflects the weighted average of deposit balances at participating Program Banks, which are not allocated equally. Funds in the Cash Account are swept to Program Banks where they earn a variable APY and are eligible for FDIC insurance. Conditions apply. For a list of Program Banks, see: www.wealthfront.com/programbanks. FDIC pass-through insurance, which protects against the failure of Program Banks, not Wealthfront, is not provided until the funds arrive at the Program Banks. While funds are at Wealthfront Brokerage, and while they are transitioning to and/or from Wealthfront Brokerage to the Program Banks, the funds are eligible for SIPC protection up to the $250,000 limit for cash. FDIC insurance is limited to $250,000 per customer, per bank, regardless of whether those deposits are placed through Wealthfront Brokerage. You are responsible for monitoring your total deposits at each Program Bank to stay within FDIC limits. Wealthfront works with multiple Program Banks to make available up to $8 million ($16 million for joint accounts) of pass-through FDIC coverage for your cash deposits. For more info on FDIC insurance coverage, visit www.FDIC.gov.

If you are eligible for the overall boosted rate of 4.05% offered in connection with this promo, your boosted rate is also subject to change if the base rate decreases during the three-month promotional period.

This is the vibe I’m sensing from nearly everyone I talk to across tech. It is especially pronounced among those at Meta.

Today’s newsletter is sponsored by Wealthfront.

One of my 2026 goals is to simplify my financial life. Wealthfront is a key part of that simplification. I have been a Wealthfront customer since 2020.

My high-yield Cash Account at Wealthfront has consistently been among the highest Annual Percentage Yield (APY). Their website is designed for how we actually manage money today, not a legacy bank bolting on features.

Right now for a limited time, Wealthfront is offering my audience an exclusive 0.75% APY boost for three months on up to $150,000, for a total 4.05% variable APY when you open your first Cash Account using my link. Go to wealthfront.com/andre. Base APY is 3.30% as of 1/30/26, is provided by program banks, and is subject to change. Promotional terms and conditions apply. See our affiliate link for more details.

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Layoff Rumors and Rumblings

With the news coming out last Friday, including unsubstantiated reports of a 20% layoff, it is safe to say everyone is on heightened alert. For a company that has already had multiple rounds of layoffs and increased rigor in its performance review process, it seems they still find new ways to cause mass internal disruption. Meta’s PR reply only added kerosene to those concerns: ‘This is speculative reporting about theoretical approaches.’

Meta employees also just came out of annual performance reviews, which already included harsher short-term performance-based headcount cuts. That means any potential new layoff, particularly at the rumored 20% level, cannot be purely performance-related. That reality adds to the tension. Nobody feels safe.

To be fair, I don’t know if there is a clean way to handle layoffs at this scale without causing widespread panic. But that doesn’t make it any easier for the people going through it, particularly when you see the company absolutely crushing it financially.

Seriously, Meta brought in nearly $60 billion in Q4 2025 alone, up 24% year-over-year. For the full year, they cleared more than $200 billion and posted nearly $23 billion in Q4 net income.

AI Spend Gone Wild

At the same time, they are pouring money into AI. Capital expenditures for 2026 are expected to land between $115 billion and $135 billion, about double 2025. Then layer on the US data center buildout, $2 billion on Manus, $14.5 billion on Scale AI, and high-profile hires costing tens or hundreds of millions each.

The unnerving thing for all tech workers is that Meta isn’t alone in this trend.

It is hard to feel sympathy for the company, but you should absolutely feel empathy for the employees.

The Hidden Weight of Waiting

It is the prolonged anticipation that weighs on you. Needing to learn about your own team’s reorg plans from news leaks rather than leadership. Being told once again to “focus on what you can control“ as if that magically eases the anxiety you feel in your chest.

That feeling sucks. You start questioning every vague meeting invite, reading into every moved 1:1, every org wide notification, and every single company wide email.

Trust me, I know.

Use This Feeling as a Forcing Function

Know Your Numbers

What I lean on in times like this is making sure you really understand your numbers, now more than ever. Make sure you have an emergency fund or access to funds that can last you at least 6 months.

You may also have the “benefit” of being at a company that has gone through multiple layoffs, so these severance packages are known.

Meta’s Prior Severance:

Think through what your plan is if you did lose your job. Think through what it would take financially to go more than six months or even a year before you land a new role. Think through what new expenses you’ll have.

Be Proactive in Your Job Hunt

Don’t get caught flat footed. Log back into LinkedIn (connect with me while you are there), reply to recruiter outreach. Even if they are not perfect fits, the act of replying sends signals to LinkedIn which will lead to you showing up more frequently in recruiter searches. Accept those old invites from past co-workers. Start replying to recruiter messages. Reach out for referrals. Kick off the process.

Back in 2023, Meta pre-announced 3 rounds of layoffs. I started interviewing ahead of my actual layoff. It is about giving yourself options.

I ultimately ran the numbers and concluded that I was not ready to commute back down into the peninsula.

Reflect on Your Enough

It’s also very possible that in the process of reviewing the numbers, you realize you might actually have enough and perhaps a severance isn’t the worst way to go. Sure, it would be nice to make it through March 2027 :), but maybe it’s no longer worth it.

Whatever happens, please be kind to yourself. It will suck. Over time, it will suck less.

Past Posts on Layoffs:

Disclosures: Andre Nader is a Wealthfront client and was compensated ~$3,330 for the testimonial and promotion of the Wealthfront Cash Account. This compensation creates a conflict of interest. Experiences may vary among Cash Account clients, and results are not guaranteed.

The Cash Account, which is not a deposit account, is offered by Wealthfront Brokerage LLC (”Wealthfront Brokerage”), Member FINRA/SIPC. Wealthfront Brokerage is not a bank. The Annual Percentage Yield (”APY”) on cash deposits as of January 30, 2026, is representative, requires no minimum, and may change at any time. The APY reflects the weighted average of deposit balances at participating Program Banks, which are not allocated equally. Wealthfront Brokerage sweeps cash balances to Program Banks, where they earn the variable APY.

If you are eligible for the overall boosted rate of 4.05% offered in connection with this promo, your boosted rate is also subject to change if the base rate decreases during the three-month promotional period.

Being a parent has taught me that predicting the future is a fool’s errand. Yet here we are, expected to model college expenses for 2036, while I don’t even know how much summer camps will run me this summer.

I’m also working with a sample size of one, so consider anything involving kids older than 7.8 to be pure conjecture.

Still, I wanted to share my personal approach to children and finances. If for nothing else, perhaps you can take comfort in my lack of confidence.

Fitting Kids into Your FIRE Plans

My pre-FAANGFIRE FIRE plans involved making lots of money in a HCOL area where the overall compensation would allow me to accelerate my savings towards my “enough” before moving to a lower cost of living area. Pretty basic spend less than you earn type stuff.

Kids changed everything. The idea of moving to a lower cost of living area just so I didn’t need to work suddenly felt selfish. I could no longer optimize my FIRE plans without taking into consideration how they would impact my daughter’s future.

That realization is how I formulated my original FIRE mission statement, where I made clear that achieving FIRE shouldn’t come at the expense of my daughter’s future opportunities.

“I want to achieve my goals while also ensuring that I also set up my daughter to have a future where she is able to contemplate ridiculous things like early retirement”

This also leaves me with the lingering question of how do I even define something so fluffy as “setting up my daughter to have a future where she contemplates ridiculous things like early retirement?”

I still don’t know. When asked, I often say, in jest, that it involves living somewhere that values strong public schools while also lowering the probability of my daughter ever setting foot into a lifted pickup truck (sorry Texas).

Perhaps reality isn’t too far…

Much of that is shaped by an often conflicting reflection on my own life. My internal monologue of “I went to public schools in Texas and I turned out all right” vs “I should be using every resource available to give my daughter a leg up in this world”.

Then there is the example I am setting. She will likely only remember me in this post-semi-FIRE state. I love that this allows me to provide a living counter to the gender norms she will be exposed to throughout her life. Seeing her mom as the financial powerhouse forces a normalization of that view. I just have to hope the benefits of that example outweigh all the other unknown ways this arrangement could mess up her future.

I am not alone. I have heard firsthand from many other families who share this same internal conflict. It is the balance of using your financial resources to ensure the odds are stacked in their favor, while also recognizing that your own success was perhaps amplified by a certain amount of struggle.

The Hedge of Uncertainty

I don’t even know what the future of college looks like. This shapes how I approach it from a financial perspective. This uncertainty forces a strategy that values optionality. I definitely don’t want to commit 100% of my daughter’s future college savings into a rigid savings account that might only allow paying for educational expenses (a la 529).

I also only have one child. Perhaps if I had multiple, this conundrum would be less of an issue. Thanks to the beauty of being able to change the beneficiary of a 529 at any time, when you have multiple kids you are more easily able to spread things around if perhaps one child doesn’t end up needing the funds or skips college altogether while the other decides they want to go to private school.

With flexibility in mind I’m aiming to cover just half of the projected costs (a target of $400k in 2036) in a 529, with the rest in a flexible taxable brokerage. I’m also thinking about the decades that follow. Researching UTMAs, the new Trump Accounts (launching in July that were part of OBBB), and other financial accounts. My goal is to maximize impact: I want to help her in her 20s or 30s, not dump a portfolio on her when she is 60 and I die at the ripe old age of 91.

Current Status

This uncertainty prevented me from doing what likely would have been the more optimal financial move. That would have entailed superfunding a 529 with up to 5 years of contributions in the year my daughter was born. That likely would have been a good “one and done” move to take care of college expenses. I didn’t though. I also am even less certain now of college expenses than I was 7 years ago. I didn’t do nothing though. I have intermittently added to a California 529 via scholarshare. The account currently sits at around $90k. If I was able to earn ~8%, the current $90k should naturally grow to reach my $200k target of 50% coverage. Banking on a linear 8% over the next 10 years leans optimistic. If I assume 5%, that would see my current $90k growing to $150k, a $50k shortfall. Doing a little math gets me to needing an additional $33k invested today to hit my 529 goal.

Be right back…

Ok, I now need ~$14k more in the 529 and I should be set.

What about the other half? The half I plan to fund out of a normal brokerage account. As of right now I plan to treat it like any other expense. I am likely to create a new brokerage account that is called “College” even though it will still be in my name. Just to give it some visual and accounting distinction to convey its real intent. This earmarks it without any of the commitment or restrictions.

More To Come

This year I want to write more about FIRE and kids. It’s been top of mind for me and for a lot of you. I want to give my daughter a real tailwind, but I don’t want that tailwind to turn into a headwind later. I can tell my instincts are shaped by how volatile money felt when I was younger. The goal is stability. I just don’t want to overcorrect and turn money into the main character in her life, or in mine.

How are you currently approaching this? For those who are ahead of me, how does my plan sound? Anything you would change?

-Andre

I created this dashboard for my personal use. With Meta & Uber RSUs constantly moving I honestly didn't know my overall compensation. If RSUs are a significant part of your compensation package, then this dashboard will help you finally understand how much you make.

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Total Compensation & RSU Dashboard Overview

The Total Compensation Dashboard is a free and powerful tool that will help you understand your compensation in real time. I created this dashboard for my personal use. With Meta & Uber RSUs constantly moving I honestly didn't know my overall compensation.

Make Your Own Copy

Total Compensation Tab (link)

This tab shows you your annual total compensation projections, monthly income summaries, upcoming RSU vests, and a look into all your RSU Grants. Future RSU income will automatically stay up to date with the current stock price.

RSU Dashboard Tab (link)

The RSU Dashboard tab gives you everything you would want to know about past and future RSU vesting. Future RSU vest values are based on the current stock price and past RSU values are based on the price on the day of vest.

RSU Simulation Tab (link)

New for 2026, the RSU SIM tab allows you play around with different future RSU values. You can manually change the “Simulated Price” and the two charts showing future RSU vests and Future RSU vests by year will update their calculations based on the price you added. This can be helpful to answer “what happens to my RSUs in 2026 if my stock drops 25%”.

Hold vs Diversify Tab (link)

I always sell my RSUs when they vest. I was always curious to understand what would have happened if I didn’t sell. This tab gives you a very simplified historical view of holding vs diversifying into IUIT. I am using IUIT since it represents just the tech portion of the S&P 500 since I thought it was a better comparison to holding a single concentrated tech stock. You can change the comparison stock to VTI in the Insert Data Here tab.

This tab is more “for fun”, and I don’t want people to make future vesting decisions based on the FOMO of holding.

Dashboard Setup Instructions

Youtube Walkthrough:

This is from the 2024 version of the dashboard, but it is largely the same. I’ll be recording a higher quality version soon.

Step 1: Creating Your Own Personal Copy

Make A Copy

The default dashboard is populated with RSU data that was created for the “New Grad FAANG Engineer’s Path to FIRE” series. The data should simulate the RSU grants to a Meta engineer who joined the company in May 2021. It is all just placeholder data and the real magic happens when you add your own data.

Clicking the link above should automatically prompt you to create a copy. If you want to view the dashboard before making a copy you can access it through this link: https://docs.google.com/spreadsheets/d/1dqyys-uGCQBbbWRId1XWSVLVb5ifTgdau8K_puUb2Ok/copy

Step 2: Updating Your RSU Data

Once you have your own copy of the dashboard it is time to add your RSU data. This sheet takes in all your equity vests to power all the dashboards.

The “Insert Data Here” tab where the raw data that powers the dashboards lives. It should be the only tab where you need to enter your vesting data. 

The primary thing you will need to update is the Company Stock Ticker in K11, followed by your Vesting Date, Shares Granted, Date Granted, Vest Description for all your RSU vests starting in Row 20.

There is some data entry required here but most of it is just copy and pasting your RSU data from whatever broker your company. Below is a specific example of how a Meta employee would access the information needed.

How To Access This Information

Meta Employee Example (May be similar if your company uses Schwab)

1. Go to Schwab > Equity Awards > Equity Details https://client.schwab.com/app/accounts/equityawards/#/equityTodayView 

2. Check “Show All Historical Awards”

3. Click “Export” in the top right to access the raw csv

The “Vest Date” and the “Shares Granted” can be copied directly from the exported CSV. For each section you will want to add the data for the “Date Granted” (which is the Award Date in the CSV) and give each vesting section a description. For Meta employees the easiest will be naming your first grant “New Hire Grant” and then each refresher with the year to help distinguish the different grants (ie “2022 Annual Refresher”).

Uber/ Solium Shareworks Example

1. Go to ShareWorks > Portfolio> RSUs, Stock Options, & Awards https://shareworks.solium.com/solium/servlet/ui/portfolio/awards

2. You will need to click into every single grant one by one

3. My process was to manually copy and paste into Excel followed by manually cleaning up the data. The key columns you want are the Vest Date and Granted (number of shares granted on that vest date).

To get the full benefit from the dashboards you will want to add all historical vests. Depending on how your equity is setup it can be a manual process, but you should only have to do this once.

Step 3: Confirm RSU Dashboards Are Populating

The dashboard should now accurately show all your RSU vests. If it is populating as expected, you are 80% of the way there!

Running into errors? Check to see if the formatting of the dates and grants is the exact same in the Insert Data Here tab as before you personalized it. This is the most common issue I have run into. There are also thousands of calculations going on in hidden tabs to populate all the calculations, sometimes things get a little buggy.

Step 4: Setup Total Comp Tab

The hardest part of your total compensation is your RSU income. Luckily, after completing the initial step, your RSU compensation will automatically update. That means all that we are left with is Base Salary and any Bonus information.

For 2023-2025: I would recommend looking at your final paycheck of the year and inputting your total Base Salary and bonus information. Your RSU data will automatically populate.

For 2026-2028:

• Annual Base Salary: Change Cells B14:B16 with your current Base Salary. If you get promoted in 2025 be sure to have your Base Salary adjusted to account for how many months you were at each salary level.

• Bonus: Update Cells C14:C16 with your expected bonus. Since these vary by company, role, level, individual performance, company performance…. how you include these is at your discretion. I prefer to assume default of 100% of my bonus percent at my level.

Monthly Income Values

• The Monthly Salary take the value for the “Year” selected in the drop down, divided by the “Pay Periods per Year” selected in the drop down, multiplied by the “Pay Periods” entered in the column for that month. Note: Meta employee’s will want to change the “2” in the December row to 3. This will treat the 27th paycheck as an extra pay period vs dividing your salary by 27. I hope to simplify this in the future!

• The Equity Value for future vests is the current stock price. For past vests, they are the stock price on your vest date.

• RSU Refresher: Depending on your employer, you may not have your most recent equity refresher. You will want to update the data after you receive those. If you employer has formulaic refreshers, you could project your refreshers by adding “estimated” vests in the primary “Insert Data Here” tab.

Prototype Tax Dashboard

One of the most requested features are more robust tax estimates. I included a tab with a very early prototype that Nathan Brown, CFP put together. I hope to flush this out more over the year. Right now, every year will use 2026 tax brackets and the state taxes are 2025.

Share your Ideas!

I hope you enjoy this spreadsheet, it was a lot of fun to make! I am sure there are a dozen bugs, please let me know what you find. I am looking forward to publishing more of my personal dashboards that helped me on my path to FIRE. If you have any ideas on future versions, be sure to share them!

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Accelerate your financial goals by partnering with me 1:1 to identify your FIRE goals and create an action plan on how to achieve it.

Each coaching plan is personalized, confidential, and the best way to get my thoughts on the specifics of your situation.

From on-going accountability, setting up a path to fire, and one-off deep dives. All from a fellow tech worker who has been there.

Book 1:1 Coaching

FAANG FIRE w/ Extra Guac

If you want to kickstart 2026 with access to some of the financial tools I actually use, that’s what the Extra Guac subscription tier is for.

For $200 annually, Extra Guac members get access to the following tools free (new users):

• 1 year free of ProjectionLab Premium to model your FIRE plans

• 1 year free of Lunch Money to add logging into your financial life

• 1 year free of Mezzi to get an AI driven insights into your portfolio

• 1 year of Carry Solo 401k for $1 to power your Solo401k

• $75,000 managed fee free with Frec to power your direct index

• 30 minutes of 1:1 FIRE coaching with me to help bring it all together

Subscribe now

Offers available for first time customers of the tools, you can upgrade to the Extra Guac tier and to claim your codes which will be delivered within 2 days.

Other Financial Tools I Use from my Partners

• Top Free Tool: Empower. If you are looking for a free alternative to track your overall net worth Empower (formerly Personal Capital) is my recommendation.

• Top All-In-One Paid Tool: Monarch. If you care about strong categorization of your spending, goal setting, smart automation, good design, and are willing to pay Monarch is an easy option to recommend ($99 normally but available 50% off with promo code MONARCHVIP).

• Premium Net Worth Tracking Tool For Complex Scenarios: Kubera. Kubera has quickly become one of my favorite net worth trackers. It helps me break down my entire net worth in all the ways I want. Designed to help high-net-worth individuals track their overall finances.

-Andre

ps, I read every reply to these emails

2026 Bi-Weekly Cheat Sheet

2026 Meta Cheat Sheet

Other 2026 Cheat Sheets

Let’s walk through a few of the sections, so we are all starting 2026 on the same page! There are also additional items below that are not included in the cheat sheet that I personally wanted in one place to reference!

Bi-Weekly Pay Schedule for most FAANG

All of FAANG seems to be on the same bi-weekly pay schedule. This typically results in 26 pay periods with two months featuring three pay checks!

One quirk is that there is occasional years with 27 pay periods. Here is a more detailed breakdown of 2026 for Meta employees that features the unique 27 pay period year they are having:

FAANG Triple Paycheck Months 2026: January and July (+ December for Meta)

A bi-weekly pay schedule results in 26 pay periods per year. This means that there are typically 2 months per year where a FAANG employee will receive 3 paychecks! Since humans are creators of habit, we tend to mentally budget based off two pay checks per month. So the “Triple Paycheck Months” can sometimes make it easier to save those “extra” paychecks.

If your first paycheck of 2026 is 1/9/2026, then your triple paycheck months would be May & October.

401k 2026 Contribution Limits

• $24,500 Employee Contribution Limit (Roth or Pre-Tax)

• $72,000 Maximum Contribution Limit (Pre-Tax/Roth + Employer Match + After-Tax)

Example of the 2026 changes for a Meta Employee:

401k 2026 Catch-Up Contributions

• If you are 50+ you may contribute an additional $8,000 Roth ONLY (New for 2026 for high earners)

• If you are between 60 and 63 there is an odd extra $3,250 catch up bringing the total for this age group to $11,250 Roth ONLY (New for 2026 for high earners)

Past Posts for Reference:

• 401k Strategies

• Mega Backdoor Roth and Understanding your True Up

Backdoor Roth IRA 2026 Limits

If you earn more than $153k filing as single or $242k married filing jointly your ability to contribute directly to a Roth IRA is phased out. You would still be eligible to contribute to a backdoor Roth IRA.

• $7,500 ( If you are over 50 you can add an additional $1,100 catch-up)

Federal Marginal Tax Rates

For tax year 2026, the top tax rate remains 37% for individual single taxpayers with incomes greater than $640,600 ($768,701 for married couples filing jointly). The other rates are:

• 35% for incomes over $256,225 ($512,450 for married couples filing jointly).

• 32% for incomes over $201,775 ($403,550 for married couples filing jointly).

• 24% for incomes over $105,700 ($211,400 for married couples filing jointly).

• 22% for incomes over $50,400 ($100,800 for married couples filing jointly).

• 12% for incomes over $12,400 ($24,800 for married couples filing jointly).

• 10% for incomes $12,400 or less ($24,800 or less for married couples filing jointly).

Standard Deduction

The majority of tax filers take the standard deduction when they file their taxes. This is essentially the amount of income that isn’t subject to federal taxes by default.

• $16,100 if Single and $32,200 for Married Filing Jointly

Long Term Capital Gains Tax Rates for 2026

Long term capital gains typically apply to realized gains on assets that were held for more than 1 year. LTCG also apply to qualified dividends.

• 15% for incomes over $49,450 ($98,900 for married couples filing jointly).

• 20% for incomes over $545,500 ($613,700 for married couples filing jointly).

Net Investment Income Tax (NIIT)

This NIIT surtax applies to investment income above the specified thresholds, impacting capital gains, dividends, and rental income.

• 3.8% above $200k Single, $250k Married

Medicare Tax Rate

All employees contribute 1.45% of their payroll income to fund Medicare, with no upper wage limit for this portion of the tax.

• 1.45% of payroll income

Medicare Surcharge

In addition to the 1.45% Medicare Tax, if you earn more than $200k in wages you would be subject to an additional 0.9% surcharge.

• .9% of additional Medicare Tax for income above $200k Single, $250k Married

Social Security Wage Base

Only the first $184,500 of wages is subject to the 6.2% Social Security tax, though self-employed individuals pay both the employee and employer portions.

• The first $184,500 of wages are subject to a 6.2% Social Security Tax (double if self-employed)

HSA 2026 Contribution Limits

Additional Reading: HSAs are 🔥 for FIRE.

• $4,400 for individual coverage, $8,750 if your family is covered by a HDHP.

FSA 2026 Contribution Limits

Unlike the HSA, the FSA is a use it or lose it account. Any amount remaining above the $680 carry over limit will be forfeited!

• $3,400 with up to $680 allowed to be carried over into 2027

Annual Gift Tax Exclusion Limits: $19,000

For 2026 you can gift $19,000 per individual without needing to cut into your lifetime exception ($15M in 2026).

This is useful to know since it can impact things like 529 contributions.

Looking to accelerate your 2026 Financial Goals?

Accelerate your financial goals by partnering with me 1:1 to identify your FIRE goals and create an action plan on how to achieve it.

Each coaching plan is personalized, confidential, and the best way to get my thoughts on the specifics of your situation.

From on-going accountability, setting up a path to fire, and one-off deep dives. All from a fellow tech worker who has been there.

Book 1:1 Coaching

FAANG FIRE w/ Extra Guac

If you want to kickstart 2026 with access to some of the financial tools I actually use, that’s what the Extra Guac subscription tier is for.

For $200 annually, Extra Guac members get access to the following tools free (new users):

• 1 year free of ProjectionLab Premium to model your FIRE plans

• 1 year free of Lunch Money to add logging into your financial life

• 1 year free of Mezzi to get an AI driven insights into your portfolio

• 1 year of Carry Solo 401k for $1 to power your Solo401k

• $75,000 managed fee free with Frec to power your direct index

• 30 minutes of 1:1 FIRE coaching with me to help bring it all together

Subscribe now

Offers available for first time customers of the tools, you can upgrade to the Extra Guac tier and to claim your codes which will be delivered within 2 days.

Other Financial Tools I Use from my Partners

• Top Free Tool: Empower. If you are looking for a free alternative to track your overall net worth Empower (formerly Personal Capital) is my recommendation.

• Top All-In-One Paid Tool: Monarch. If you care about strong categorization of your spending, goal setting, smart automation, good design, and are willing to pay Monarch is an easy option to recommend ($99 normally but available 50% off with promo code MONARCHVIP).

• Premium Net Worth Tracking Tool For Complex Scenarios: Kubera. Kubera has quickly become one of my favorite net worth trackers. It helps me break down my entire net worth in all the ways I want. Designed to help high-net-worth individuals track their overall finances.

-Andre

ps, I read every reply to these emails

I just finished wrapping up an 80 degree Texas Christmas at my in-laws and thought it would be a good time to reflect back on the year.

2025 by the numbers

It has been another good year for the financial markets. We are closing the year near all-time highs for the overall US markets (VTI up 17% YTD) as well as international markets (VXUS up 29% YTD). While all FAANG companies reached all-time highs during 2025, many hit the high water mark earlier in the year, while others who were lagging early in the year found their stride later in the year (looking at Google and Apple).

2025 by the vibes

The year didn’t feel as positive as the numbers suggest. It felt more like being a passenger in an Uber XL with a driver who has yet to master the gas pedal, the brake, or the concept of cruise control. There was clearly forward momentum, but the constant lurching was enough to churn even an iron stomach.

Yet here we are. The seemingly imaginary numbers on the net worth trackers are once again at all-time highs.

Growth vs Principal Milestone

Standing at these all-time highs makes it easy to forget the long, slow grind where market returns felt nonexistent and I constantly found myself asking: “Why isn’t it compounding?? Isn’t compounding supposed to be the eighth wonder of the world??”

It took me a few years to grasp the idea that compounding early on in your FIRE journey is drastically overrated. This is especially true for FAANG workers who have the ability to save significant amounts each year.

Like most FAANG workers, the primary driver of my net worth was simply how much I was able to invest. My contributions were all that mattered.

This is why I was surprised by a milestone I just hit. A milestone that has taken more than 16 years for my dual income tech household to hit.

2025 Milestone: More than 50% of my FIRE portfolio balance is currently coming from growth.

I never actually set a goal to hit this 50% growth mark.

That is primarily an output of the market, not something I can control. It’s simply an interesting data point I stumbled upon while updating my spreadsheets. The only reason I noticed it is because I was busy tracking the one number I do track religiously: my contributions.

Contribution Goals

Contributions is one of my favorite personal finance goal metrics. Most people gravitate to percent based goals, like “saving 50% of my income” or “net worth reached $500,000. I really hate percent based metrics and total volume metrics leave you at the whims of the market. For me a good financial goal should ladder up to my “Enough Number”, be motivating to track, be mostly in my control, and encourage the right long term behaviors. That is how I landed on total annual contributions for my primary yearly goal.

It is because I focused my goals on contributions that I started tracking my contributions on a regular basis.

So if you are looking for a good 2026 financial goal, my vote is on making it a contribution goal.

Now, contribution goals are not without flaws. The biggest one is that if you get compensated with a more variable income source like RSUs or bonuses then it can make hitting your goal not achievable due to no fault of your own. That is when you simply re-goal… who doesn’t love a good re-goaling exercise. This is your personal goal, nobody is going to give you a hard time about it other than yourself.

Financial Goals

Since we are heading into the new year and many of you are thinking about new year’s resolutions, I would encourage you to shift away from resolutions and focus on actual numeric goals.

My annual goals would typically look like:

“Contribute $200,000 into my FIRE accounts”.

This could be further broken down for 2026 (based on cash-flow waterfall):

• $72k into my 401k

• $72k into my partner’s 401k

• $15,000 into our backdoor roths ($7.5k each)

• $41,000 into our taxable brokerage

How I tracked contributions.

Another downside is that I have not yet found a good way to track this automatically. Instead, I relied on a Google Sheet I have been updating manually.

• I only include contributions into “FIRE” accounts.

  • Only includes accounts that I based my Enough Number on.

    • Taxable Brokerage, Pre-Tax Accounts, and Roth Accounts (including HSAs)

  • Doesn’t Include Vested Company RSUs

    • This added an extra mental incentive to sell on vest and diversify, because otherwise it wouldn’t count towards my goal.

  • Doesn’t include 529s, uninvested cash, emergency funds, UTMAs.

• I track taxable, pre-tax, and Roth contributions separately

• Dividends automatically roll into Growth.

• Company 401k matches should be included in contributions.

FAANG FIRE w/ Extra Guac

If you want to kickstart 2026 with access to some of the financial tools I actually use, that’s what the Extra Guac subscription tier is for.

For $200 annually, Extra Guac members get access to the following tools free (new users):

• 1 year free of ProjectionLab Premium to model your FIRE plans

• 1 year free of Lunch Money to add logging into your financial life

• 1 year free of Mezzi to get an AI driven insights into your portfolio

• 1 year of Carry Solo 401k for $1 to power your Solo401k

• $75,000 managed fee free with Frec to power your direct index

• 30 minutes of 1:1 FIRE coaching with me to help bring it all together

Subscribe now

Offers available for first time customers of the tools, you can upgrade to the Extra Guac tier and to claim your codes which will be delivered within 2 days.

Other Financial Tools I Use from my Partners

• Top Free Tool: Empower. If you are looking for a free alternative to track your overall net worth Empower (formerly Personal Capital) is my recommendation.

• Top All-In-One Paid Tool: Monarch. If you care about strong categorization of your spending, goal setting, smart automation, good design, and are willing to pay Monarch is an easy option to recommend ($99 normally but available 50% off with promo code MONARCHVIP).

• Premium Net Worth Tracking Tool For Complex Scenarios: Kubera. Kubera has quickly become one of my favorite net worth trackers. It helps me break down my entire net worth in all the ways I want. Designed to help high-net-worth individuals track their overall finances.

-Andre

ps, I read every reply to these emails

Based on a backtest of the past 15 years of S&P 500 returns, maxing out your 401k within the first four months of the year would have resulted in a final balance 3.2% higher than an equal monthly contribution strategy.

In this analysis, I modeled 401k contribution strategies that front load an entire year’s contributions over 1 to 11 months and compared them with an equal monthly contribution strategy.

Here are the per-year results:

• Front loading within the first four months of the year outperformed equal monthly contributions in 13 of the last 15 years.

• Over the full 15-year period, this translated into an additional $23,852 compared to splitting contributions evenly throughout the year.

Subscribe now

When previously discussing 401(k) contribution strategies, I leaned on academic literature that consistently found lump sum investing outperforming dollar cost averaging, which helped justify why I front-loaded my own 401(k) while working at Meta.

I still wanted to understand the real world difference between aggressive front loading, which can require extreme budgeting early in the year, and simply spreading out contributions evenly over the year.

In this analysis, I modeled a range of 401k contribution strategies that front load an entire year’s contributions over 1 through 11 months and compared each of them against an equal monthly contribution strategy.

The chart below shows a single comparison: front loading contributions over the first four months of the year versus spreading contributions evenly across all twelve months. This allows us to compare how the two strategies performed in each individual year.

Each row represents a calendar year, with the dots showing the annual return achieved under each contribution strategy.

Note: This analysis is based on a 100% S&P 500 portfolio using total returns calculated from Shiller’s published historical data. Data was from 2010 to 2024. Based on prior Vanguard research, default target date funds would be expected to show a similar pattern, simply reduced in magnitude.

The results of this analysis are consistent with prior academic literature on lump sum investing, which finds higher median returns from earlier investment timing, alongside lower volatility for evenly split contributions.

Distribution of Returns Across Strategies

The chart below shows the distribution of annual returns across the twelve contribution strategies. The more aggressively you front load, the higher the median return tends to be, but with a much wider range of outcomes. Evenly split contributions cluster more tightly, which reduces volatility, at the cost of lower returns.

Overall the results seemed consistently to say that the sooner you’re able to contribute, the better. Every month you pulled contributions forward added a little more return.

Perhaps it is not as surprising when the past 15 years looked like this:

Now let’s take a look at what the dollar impact would be for someone who consistently stuck to one of these strategies starting in January 2010 through the end of 2024.

The red line represents front-loading the entire year’s pre-tax 401k contributions up to the annual limit, and it finished as the leading strategy over the full period. The dashed blue line, representing the underlying S&P 500 total returns, is graphed on the right axis to help contextualize the market conditions over the period.

Over the full 15-year period, front-loading contributions within the first four months resulted in a 3.2% higher final portfolio value compared to an equal monthly contribution strategy.

In dollar terms, that meant $23,852 more in the account for someone who front-loaded their 401k contributions compared to someone who split contributions evenly throughout the year.

For those curious how this scales at higher contribution levels, using full limits including match and mega backdoor contributions, the four-month front-loading strategy ended $76,484 ahead of equal monthly contributions after 15 years, based on $903k in total contributions.

Should You Actually Do This?

Now let’s dig into when this strategy makes sense in practice, and when it doesn’t, in the next section.

Should You Front Load Your 401k in 2026?

In 2026 the full 401k limit for those under 50 with access to a plan with a Mega Backdoor Roth IRA is $72,000.

Should You Front Load Your 401k?

The real answer has more nuance. There’s a subtle fallacy in this analysis that’s easy to miss, especially when looking at the more aggressive front loading options.

No, it isn’t an income issue. Many in FAANG make more than enough income to pull off front loading within the first four months. I personally did it nearly every year while at Meta. Six or more pay periods plus a healthy annual bonus landing in Q1 made it completely doable.

My primary issue with this analysis is that you still need to fund your life while nearly 100% of your paycheck is going into your 401k. That usually means either building a cash buffer in Q4 of the prior year or planning to live off upcoming RSU vests.

In the first case, this data actually reinforces that you would have been better off investing those funds in your taxable brokerage as they became available. In the second case, assuming your spending isn’t changing, if you simply invested your RSU proceeds as they became available, the gains from front loading would be greatly diminished.

Plan and Personal Nuance Can Change the Answer

It is also important to understand the specifics of your individual 401(k) and to factor in your plans for the new year.

If your employer matches on a per-paycheck basis, front loading could result in missing out on your 401k match (aka free money). The lost match will typically dominate any expected benefit from investing earlier in the market.

If you anticipate switching employers, the strategy changes. You may be able to double-dip on Mega Backdoor Roth contributions, while also leaving enough room in your employee contributions to maximize the match from both employers.

Example Scenario: You’re a current Meta employee planning to move to Google after your 2026 bonus lands. Here’s what I would focus on:

While at Meta:

1. Contributing to your pre-tax 401k up to $12,250 which will unlock the full Meta match of $12,250. Then stop your pre-tax contributions!

2. Beyond reaching the full match you want to contribute to the Mega backdoor as much as the plan allows which I believe is $35,250.

While at Google:

1. Thankfully you will have $12,250 of employee contributions available. This will allow you to get $6,125 of Google’s employee match (50%).

2. You can also contribute as much as possible to Google’s Mega Backdoor. If their limits match Meta’s, that would allow at least $35,250.

This is a clear case where front loading would result in being able to contribute less into your 401k overall.

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What Will Be My Personal Approach in 2026?

I’ll be approaching 2026 with two very different 401k setups.

On my end, I’ll be able to contribute $72,000 into a Solo 401k using Carry, which I have access to via the Extra Guac subscription tier. My partner, on the other hand, will be contributing through Uber’s 401k, which comes with an $8,000 company match and very specific matching mechanics.

Let’s start with my partner’s Uber 401k. The overall 401k contribution limit in 2026 is $72,000 and Uber provides an $8,000 company match. Match contributions are applied per paycheck, if there is a contribution, otherwise the match will be trued up in the following year for the missed match, if you left room for it.

To be continued, I’ll share all my plans in a future newsletter!

Can you believe it is nearly 2026 already! How are you setting up your 401k contributions going into 2026?

I dove into this concept back in early 2022 in a post titled “FIRE = TIME”, where I created my own version of Tim’s visual. A lot has changed since then, even though it’s only three more rows of squares filled in. I felt a fresh look was in order.

My Life in Weeks (so far)

Each week is represented by an avocado. Each row is 52 avocados, or one year. I highlighted a few of my recent milestones. Looking back is fun, but it’s the view into the future that brings the holiday existentialism I’m aiming for.

My Future Life in Weeks

This starts to hit harder.

Between her birth and when she starts college is ~18.5 rows of avocados. Roughly 45% of those avocados are already in the past.

It reminds me that I have 10 more Thanksgivings and 10 more Christmases before my daughter is in college.

Will she come home during the break to visit us? I hope so. Although, I don’t think I always made the Thanksgiving trek home.

Will she be off traveling with friends instead? Need the time to finish a paper or project? Choose to spend it with another family?

I am thankful that I get to see my own mother ~2 weeks per year.

Which brings up further thoughts I don’t want to contemplate too deeply.

But it does remind me to close my laptop now, and more deeply appreciate the time I have, and be thankful for those around me.

All those future avocados are far from guaranteed.

-Andre

I highly recommend WaitbutWhy’s “Tail End” which is the source and inspiration behind this.

Earlier this week I went live with to talk about end of year planning! I apologize for the video stuttering. No clue what I broke this time. The audio is still solid, you can catch the episode on Apple Podcasts and Spotify. More of a reader? I have the breakdown along with relevant FAANGFIRE articles linked for each topic.

Episode Summary

Brent walked through his three pillars of year end planning: tax loss harvesting, income planning, and giving. The usual suspects. Then we added the tech worker version, which is basically the same game but with a few gotchas to be aware of.

Tax Loss Harvesting and Wash Sales

Most people think loss harvesting is a December thing. It is not. If you are sitting on losing lots, either from RSUs or regular index fund buys, this is a great time to clean those up.

The headache comes from wash sales. And this is where tech workers can run into issues since vesting counts as a purchase.

Quarterly vesting gives you room to harvest losses if you also sell the new vest.

Monthly vesting traps you in a permanent wash sale loop. Uber and Google folks know exactly what I mean.

Relevant FAANG FIRE Articles:

• Tax Loss Harvesting

• Tax Loss Harvesting via Direct Indexing

• RSU Vesting and Wash Sales

Safe Harbor and Under Withholding

The classic April surprise comes from RSUs being withheld at 22 percent. If you are in the 24 percent bracket or higher, you are under withheld from day one.

Now is the time to run your actual numbers. Add up your pay stub, RSU income, dividends, interest, and any side income so you are not guessing.

Safe harbor often protects you from penalties, but the surprise still sucks.

Relevant FAANG FIRE Articles:

• Explainer on Supplemental Withholding Causing Tax Bills

• Avoiding Under Withholding in the Future

• The Three Most Common Tax Mistakes

Backdoor Roth Refresher

If you are over the Roth income limits, the backdoor Roth IRA is still one of the strongest levers we have to get an additional $7,000 into a Roth IRA.

One rule matters more than anything: do not end the year with money in a traditional or rollover IRA. That triggers the prorata rule and wrecks the whole strategy. Roll old IRAs into your 401k first, then do the backdoor.

Relevant FAANG FIRE Articles:

• Pro-Rata Rule for Roth IRAs Explained

• Backdoor Roth IRA Walkthrough

Mega Backdoor and Job Switching

The overall seventy thousand dollar 401k limit is per plan, not per person.

So if you switch jobs midyear, you may be able to double dip on after tax contributions and employer match.

Relevant FAANG FIRE Articles:

• Optimizing Your 401k for a Mid-Year Job Switch

Charitable Giving and Donating Shares

If you have appreciated stock you want to unload, donating shares in kind is one of the most tax efficient moves available. Even if you do not itemize.

The annoying part is that donating shares often feels like traveling back in time. Some brokers let you do it online. Others make you print forms or fax things. Yes, fax.

If you want the deduction now but are undecided on the charity, a donor advised fund gives you breathing room. Fidelity and Daffy are good low fee donor advised funds.

Relevant FAANG FIRE Articles:

• I don’t have on yet!

Other Year End Checks

• Confirm your FSA and dependent care balances.

• Look at last year’s capital gains and loss carryforwards.

• Remember that California and New Jersey tax HSA gains.

• If you want tax help next year, call CPAs now. The good ones close their doors by January.

• And yes, this is also when everyone orders their annual VSP sunglasses.

• See End of Year Tasks breakdown for 2024

That is the rundown from this week’s episode. Hope it helps you get your own year end dialed in.

-Andre

The main point of this post is to tell you that it is ok to keep your old 401k. You don’t need to do anything with it.

The primary reason I still have mine is so I can still contribute to a backdoor roth ira. Even if I didn’t want to do a backdoor roth, there is minimal downside to keeping my 401k in my Meta plan.

So if you were recently laid off, or voluntarily left your job, I don’t want you to feel like your 401k is something you need to deal with right away. Odds are, doing nothing with your 401k can be perfectly fine.

It used to be common wisdom that after you leave a company, you should roll your workplace 401k into a rollover IRA.

I think this is bad advice.

When you leave a company, you typically have three options for what to do with your 401k. For those in big tech, choosing to use a rollover IRA is the worst of those three options.

Three Options on Handling Old 401ks

Option 1: Do Nothing

Do nothing. Keep your 401k at your old company. This is a perfectly good option, especially for those who recently left their jobs. Don’t feel like you need to do anything with your 401k right away. You can ignore it, knowing that it is often a perfectly good solution. You can look at me; I still have my Meta 401k and I was let go more than two years ago.

Option 2: Roll Your Old 401k Into Your New Company 401k

Roll your old 401k into your new workplace 401k. I am a fan of simplifying your financial life. The fewer accounts, the better. So if you join a new company, consolidating all your 401ks into your new one can be a good option. If I didn’t semi-fire, I would likely choose this option.

Option 3: Roll Your 401k into a Rollover IRA

Roll your old 401k into a Rollover IRA. This used to be the common advice for anyone leaving a company. I think this should no longer be the default! I think anyone who tells you to do this should be able to clearly explain why. (I have encountered advisors who recommend this, which I interpret as a way to increase the assets they manage and collect fees on).

FAANG folks, ex-FAANG, or those soon to be ex-FAANG, and really all high earners in tech, the generic advice around your finances is often wrong. It wasn’t written for you! That is why I write this newsletter! If you are into that, consider subscribing. If you have a friend that might be into that, I’d definitely appreciate a share.

Subscribe now

Four Reasons Why I Still Have My Meta 401k

TLDR:

1. If I rolled my 401k into a rollover IRA, then I wouldn’t be able to contribute $7,000 per year into my Backdoor Roth IRA due to the pro-rata rule.

2. Meta’s 401k plan is actually great. For ex-employees, annual fees are only $23. The expense ratios on the funds are lower than you could get elsewhere.

3. Even if I didn’t like the 401k options, Meta’s 401k has BrokerageLink, which allows you to purchase nearly almost any stock or funds on the open market.

4. There are additional asset protections that a 401k has that an IRA doesn’t.

Reason #1: Backdoor Roth Compatibility

The main reason I still have my Meta 401(k) is that it lets me keep doing the backdoor Roth.

If you have an existing traditional or rollover IRA, the IRS treats all your IRAs as one when calculating taxes on a Roth conversion. That “pro-rata rule” often makes the Backdoor Roth not worth doing.

Rolling my 401(k) into a rollover IRA would trigger that rule and kill the Backdoor Roth.

Check out my longer article on the specifics of the pro-rata rule for more details, especially if you still want to do a backdoor Roth (or already did one this year).

Reason #2: Meta’s 401(k) Plan Is Actually Really Good

This used to be common wisdom or generic advice: “After you leave your employer, you should roll over your 401(k) to a rollover IRA”

But it’s 2025 (or later, depending on when you are reading this), and many of you are working at FAANG companies with really good 401(k) plans. The reason this advice was prevalent in the past was because 401(k)s were notorious for having terrible options and super high fees. You’d be stuck with things like American Funds with 1%+ fees on everything, and you were restricted by what you had access to within your 401k.

If you’re working at a FAANG company, or really any large employer, your options are probably great.

Let’s look at Meta’s 401(k) for example. I have access to a full array of funds that I couldn’t get as a normal consumer. These are institutional-only options. I have State Street investments with extremely low fees (some 0.01% or lower), and there are no annual fees.

One thing to look out for: if your old company’s 401(k) starts charging annual fees now that you’ve left, those fees can be in the hundreds of dollars and make it not worth keeping. But in Meta’s case, it’s only $23 per year, which is minimal.

Reason #3: Investment Flexibility (BrokerageLink)

Another reason people recommend rollovers is to get more investment options.

Meta’s 401(k) has access to something called BrokerageLink, which allows you to purchase any fund in the open market. So I’m not only restricted to the core plan funds. I can essentially buy anything.

Investment options alone are no longer a good reason to roll over.

Reason #4: Asset Protection

Finally, 401(k)s have some specific asset protections that IRAs don’t.

There is a lot of nuance here, that varies by state. It is worth understanding how your state treats IRA accounts and what’s at risk if you get sued, go through bankruptcy, or a divorce.

California, for example:

In California, some retirement accounts are protected (such as 401ks and profit-sharing plans). Others are more vulnerable to judgment creditors (such as IRAs). -NOLO

Based on the article linked above, it seems like there are still protections in place for rollover funds. I am very much not a lawyer, so I won’t begin to think through strategies that involve cycling funds through a 401k.

This still highlights differences in protections for 401k accounts and IRA accounts, which are very state-specific.

What Should You Do With Your 401k If You’ve Left Your Company?

So, should you do what I did and keep your old 401(k)?

You have to look at all the details:

• What are your investment options?

• What are the fees?

• Do you plan to keep doing the backdoor Roth?

• Is your new employer’s 401k better?

Option one is to do nothing. I don’t think you should feel bad for not dealing with your old 401(k) and just keeping it there.

Option two, if you’ve gotten a new job, is to move your old 401(k) into your new employer’s 401(k). Most plans will allow this. This is another good option if you still want to do the backdoor Roth and avoid the pro-rata rule.

Option three is rolling it over into a rollover IRA. That can be a good option if the funds in your 401(k) are poor or the fees are high, and you don’t plan to do a backdoor roth.

What About My Roth Funds?

Did you know I don’t have any Roth funds within my Meta 401k?

One of my main justifications for keeping my Meta 401k was so I could still do the backdoor Roth IRA without running into the pro-rata rule, by having funds in a rollover IRA. This only applies to pre-tax IRA accounts. Having a Roth IRA with funds separate from your 401k doesn’t impact your ability to do a Backdoor Roth IRA at all.

I have never kept my Roth funds in my Meta 401k. These were funds that resulted from contributing to my Mega Backdoor Roth. Even though Meta had an automatic in-plan conversion of after-tax funds to a Roth 401k, I would still roll those Roth funds out into a separate Roth IRA.

Why would convert my mega backdoor roth ira funds from my 401k into a separate Roth IRA?

Honestly… it was to make it easier for me to track my investment funds across different tax types (Roth, Pre-Tax, Taxable). This isn’t a practical reason, it just made it easier for me to personally track in my spreadsheets. Fidelity required too many steps for me to easily see the breakdown of Pre-tax vs Roth. It is there; it was just a pain to parse out. So I would regularly roll my Roth funds into a separate Roth IRA.

Meta’s 401k allowed me to move Roth 401k funds into my Fidelity Roth IRA directly through the “Rollover” flow in NetBenefits. Not all 401ks allow this, even my partner’s Uber 401k doesn’t make it possible without calling Fidelity. So your mileage may vary!

The Takeaway

The main takeaway: beware of generic financial advice, especially advice from past generations that no longer applies.

If you’re in tech with a strong 401(k) plan, the old “always roll it over” advice isn’t necessarily true anymore.

Understand:

• The pros and cons of rolling over

• The option of moving it into your current employer’s plan

• And that it’s okay to just keep it where it is

I’m also a big fan of simplification. Over time, if you have multiple old 401(k)s sitting around, that’s not ideal. If you get a new job with a decent plan, consider consolidating them, but be mindful of the backdoor Roth implications.

If you’re not doing a backdoor Roth, don’t overthink it. Keep it simple.

If you have any questions, drop a comment or reply to the email if you got this via the newsletter.

Thanks again for being a subscriber!

-Andre

Earlier this year my wife asked me two simple questions:

“Where is our money?” and “Help me understand it.”

Not being able to clearly explain my web of accounts pushed me to simplify our entire financial setup. A key part of that was rethinking how we handle our emergency fund.

Today’s newsletter is sponsored by Wealthfront.

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Evolving My Strategy

Over the past few years I’ve written about my tiered emergency funds, the savings prioritization waterfall, and the need for simplification. This year, I finally put all of those lessons into practice and made some changes.

I really wanted to simplify things. I wanted to be able to easily explain to my wife why we had each account. I wanted to make it easy for her to take over if something happened to me.

That doesn’t mean there isn’t some smart optimization happening. Just that every account needed to earn its place.

Shedding the dead weight

I went on an account closing spree:

• Three random Fidelity checking/savings accounts → closed.

• Fidelity brokerage link account → closed.

• Ally Invest account → closed.

• Multiple Chase accounts → closed.

• Citi checking account → closed.

Efficiency, simplicity, and easy explainability were the core goals.

At one point, the “return on hassle” for juggling accounts and playing the points game made sense. But in 2025, the payoff wasn’t worth the mental clutter.

One Core Checking Account: 1-Month Expenses

Now things are simple. I keep one checking account with one month of expenses. This is where my wife’s W-2 income gets deposited, our credit cards get paid off, and the rent goes out.

I like having a bank account with a physical branch for those rare moments when you need to walk in (you know who you are, requesting a medallion signature in 2025). There doesn’t need to be anything special about this account; it just needs to be nearby and not require maintaining a large balance to avoid fees.

Building the Real Buffer: 6-Months Expenses

Back in 2023, my tiered approach to rainy day funds meant keeping 2–3 months of expenses in my Wealthfront Cash Account as part of my “tier 2”. A lot has changed since then.

Today, I’ve moved closer to a one-year cushion for my overall emergency fund. That shift makes sense for my family as we are now a single-income household.

Even with millions in a taxable brokerage, I prefer having my emergency fund extremely liquid. When I am fully FIRE, I’ll transition this bucket to be where I will hold 6-months of my annual portfolio withdrawals (see the math 3% withdrawal rate math here).

What hasn’t changed is where I keep the bulk of those reserves. I keep the first six months of my emergency fund in my Wealthfront Cash Account, these are the dollars I’d immediately tap into.

I’m currently earning a base 3.75% APY on my Wealthfront Cash Account without needing to jump through hoops. The APY has consistently remained competitive even as rates shifted over the past five years, solidifying my original reason for utilizing them.

Too many people let their savings sit idle. It physically hurts me when I see friends with large sums sitting in their checking accounts earning nearly 0%. I prefer keeping a portion of mine in an account that earns a competitive yield while still being easy to access.

If you end up signing up, don’t forget to use Wealthfront.com/Andre for an extra 0.50% APY for three months.

Tax-Aware Secondary Buffer: 5-Months Expenses

I keep the rest of my emergency reserves in money market funds at my primary brokerage. The reason for the change here was that I started thinking less about the posted yield and more about the after-tax return that really matters.

For a high-income household in California, roughly half of interest income goes to taxes.

Key Takeaway: Interest rates alone don’t tell the entire story.

I am currently holding the remaining 5-months of my emergency fund in a money market fund. The specific one that makes sense for me might be different than the one that makes sense for you.

I use FDLXX (VUSXX is the Vanguard equivalent) because it primarily holds federal treasuries, making the interest exempt from California state taxes. If I lived in a state without income tax, the municipal money market comes out ahead (FTEXX).

Yields shift daily, and some weeks the muni fund wins, other weeks the treasury fund does. I don’t over-optimize this. The goal is simply to earn a competitive, tax-aware return on cash I might not need for months.

I am going to this level of detail because some people treat their emergency fund as a catch-all excuse for holding too much cash. It starts as six months of expenses and quietly grows into more than a year of idle money.

Knowing Thy Numbers

Many people I talk to have very round numbers for their emergency fund. Fifty thousand. One hundred thousand. When I hear that, it usually means they have not done the math.

The more arbitrary the number, the more hesitation there tends to be around investing the rest. It is often a sign they are not confident their emergency fund would actually cover them in a real emergency.

That is why it is so important to know, with precision, how much your current lifestyle costs each month. Know your fixed costs. Know your discretionary costs. For me, my emergency fund is based on our current lifestyle. I don’t want to have to change anything if something goes wrong. Maybe you would be willing to cut back a little more, but it still comes down to knowing your numbers.

Some third-party tools I use to help me understand my numbers.

The Simplification Payoff

In the past, I had three separate “tiers” of emergency funds, multiple banks, and accounts scattered across the landscape. Today, it’s distilled down to:

1. One local checking account with 1 month of expenses.

2. Wealthfront with a 6-month of expenses.

3. Brokerage money markets for tax-efficient overflow with 5-months of expenses.

That’s it. Clean. Simple. Easy to explain to my wife, easy to manage, and easy to access if something goes wrong.

How do you have your emergency fund set up? Leave a comment or reply to this email and let me know.

Disclaimer: Andre Nader is a Wealthfront client and was compensated $5,000 for the testimonial and promotion of the Wealthfront Cash Account. This compensation creates a conflict of interest. Experiences may vary among Cash Account clients, and results are not guaranteed.

The Cash Account, which is not a deposit account, is offered by Wealthfront Brokerage LLC (”Wealthfront Brokerage”), Member FINRA/SIPC. Wealthfront Brokerage is not a bank. The Annual Percentage Yield (”APY”) on cash deposits as of September 26, 2025, is representative, requires no minimum, and may change at any time. The APY reflects the weighted average of deposit balances at participating Program Banks, which are not allocated equally. Wealthfront Brokerage sweeps cash balances to Program Banks, where they earn the variable APY.

If you are eligible for the overall boosted rate of 4.25% offered in connection with this promo, your boosted rate is also subject to change if the base rate decreases during the three-month promotional period.

We’ve covered strategies like tax-loss harvesting and direct indexing before, but for many high-earning tech employees with large, concentrated holdings, those tools alone may not be enough. This is especially relevant now as more financial advisors are leading with their tax expertise as a way to win new clients. And while that can add real value, I want the FAANG FIRE community to go into those conversations fully informed.

On the latest Not Advice podcast, I sat down with my co-host Brent Sullivan, an expert in tax-aware investing, to walk through a realistic scenario that many FAANG employees face. Together, we unpacked several potential solutions and their trade-offs.

This post is a high-level recap of that conversation. For the full deep dive, you can listen on YouTube, Apple Podcasts, or Spotify. And if you find it helpful, subscribing and leaving a review goes a long way in supporting the show.

A Real Conversation With an Advanced DIY Investor

To make the conversation with Brent real, I built a fictional scenario loosely modeled on my own situation. The numbers are inflated, rounded, and simplified so we could focus on the strategies rather than the messy details.

Here’s the backdrop: I sold every single Meta RSU vest during my 10 years there and kept my portfolio diversified. But I wasn’t as disciplined with my partner’s Uber shares. She’s been there for a decade and is still employed, which is why I’m semi-fired and not retired. Now, with Uber at $100 per share, we’re sitting on a position that’s bigger than the percentage I ever said I’d be comfortable holding.

So in this podcast, I stepped into the role of an advanced DIY investor with real questions about how to handle a concentrated position. The scenario we walked through is fictional, but it’s close enough to reality that I’m genuinely working through it myself.

The Scenario Details

In our scenario, the advanced DIY investor has a $10 million invested net worth. Of that, $1 million is tied up in a single concentrated position at their current employer, making up 10% of their entire portfolio. They also have $500,000 in cash in their taxable account waiting to be deployed.

The rest breaks down like this: $5.5 million in their taxable account spread across low-fee index funds like VTI and VXUS, and another $3 million in retirement accounts split between Roth and pre-tax. Outside of the concentrated stock and cash, their allocation looks like a textbook Boglehead portfolio: 55% U.S. equities, 30% international, and 15% bonds.

Profile Snapshot

• Net Worth: $10M

• Location: California

• Status: Married Filing Jointly

• Taxes: 37% Federal, ~10.3–11.3% CA

Portfolio Composition

• Taxable Account: $7M (70%)

  • Diversified Funds (VTI/VXUS): $5.5M (55%)

  • Employer Stock: $1M (10%) — Cost Basis $300K, $700K Unrealized (long-term)

  • Cash: $500K (5%)

• Retirement Accounts: $3M (30%)

Key Issue: $1M concentrated employer stock position with large unrealized gains.

Some Solutions to Diversifying

1. Just Sell The Damn Thing

It’s fun to nerd out on complex strategies, but every conversation about diversifying a concentrated position should start with the simplest move: sell the stock, pay the taxes, and move on. That’s the baseline to measure everything else against.

In our example, the investor has a $1M position with $700K in unrealized long-term gains. In California, that means roughly a $260K tax bill. Sell, pay, and you’re left with about $740K to redeploy into VTI, VXUS, whatever you want—and you never have to think about that single stock again. Kind of nice, right?

2. Basic Tax Loss Harvesting and Direct Indexing

Perhaps you can look at your individual tax lots and identify the tax impact per share of some lots that are negligible allowing you to sell a significant chunk with more minimal tax impact and spread the remaining out over the next year giving you more time for basic tax loss harvesting or tax loss harvesting with direct indexing.

One option is to dig into your tax lots and sell shares where the tax impact per share is negligible. That lets you move a good chunk now and spread the rest into next year, giving you more room for tax loss harvesting—or even better, harvesting through direct indexing.

Timing really matters here. If you start in Q4, you’ve only got a few months, which won’t move the needle much. But with a full year, the data shows a direct index of the S&P 500 can harvest about 14% of the portfolio in losses. On $1M, that’s roughly $140K—more than half of the $260K tax bill from simply selling outright. So one play could be: sell, reinvest through a direct index, and let tax loss harvesting do a big part of the heavy lifting.

Timestamped Youtube Link to Tax Loss Harvesting and Direct Indexing

3. Long Short Tax Loss Harvesting

Now let’s say it’s late in the year and you don’t have 12 months to let direct indexing work. This is where a more aggressive approach comes in: long short tax loss harvesting.

The idea is simple: by using margin and adding short positions, you expand the “surface area” of your portfolio. More surface area means more opportunities for tax loss harvesting. On the long side, the extra cost basis from margin creates more room for losses. On the short side, if the market goes up, your shorts lose value—which can also be harvested as losses.

In other words, you’re deliberately creating volatility inside the portfolio so there are just more opportunities to harvest. And while a direct index might harvest 30–40% of the initial capital over 10 years, a long short portfolio with leverage can push that number dramatically higher—200–300% in some cases.

The trade-offs? Costs, complexity, and tracking error. More leverage means more fees, financing costs, and exposure to the portfolio manager’s choices. But if you only have a few months left in the year and need to generate meaningful losses fast, long short harvesting can be a powerful tool.

Timestamped Youtube Link to Long-Short conversation

4. Exchange Funds

An exchange fund gives you instant diversification without selling your concentrated stock. You contribute your shares “in kind” alongside other investors and end up holding a slice of the whole pool instead of just one company.

The trade-off: you’re locked in for seven years. That’s the rule to keep the tax benefits intact. Costs are lower than they used to be, and you avoid triggering capital gains on contribution, which is the real draw.

Most funds also include some illiquid assets, usually real estate, to preserve tax treatment. You typically won’t get stuck holding those directly, but it’s worth knowing they’re in the mix.

Bottom line: instant diversification and tax deferral, at the cost of liquidity for seven years.

Timestamped Youtube link to Exchange Fund conversation

5. CRUTs: Charitable Remainder Unitrusts

Overly simplified because I am still trying to wrap my head around this one. This is more typically employed at higher amounts than this specific scenario deals with, but can be a powerful tool to be aware of.

A CRUT lets you move your concentrated stock into a trust, avoid triggering capital gains, and get an immediate charitable deduction (usually 20–40% of the contribution). The trust then sells the stock, reinvests the proceeds, and pays you (or your beneficiaries) an annual income stream.

The catch is big: once the shares go in, they’re gone. The trust is irrevocable, and when the term ends, at least 10% of the assets must go to charity. Along the way, the payouts you receive are taxable based on the character of the underlying income.

It’s a complex, higher-fee solution, but it turns a chunky stock position into a diversified portfolio plus a predictable income stream—while locking in a charitable legacy.

Bottom line: upfront tax break and steady payouts, but loss of control and assets must eventually go to charity.

Timestamped Youtube Link for CRUT conversation

6. 351 Conversion: Seeding an ETF In-Kind

Just when I thought we were wrapping up the conversation Brent teased 351 Exchanges as another option. I didn’t let him cut off the conversation there! So the podcast went an extra 30 minutes as we dove into the topic that Brent has literally written a meme filled guide on:

A 351 exchange lets you contribute a diversified portfolio (no single stock over 25%) into a newly launched ETF. Your concentrated position can go in too, as long as it’s less than 25% of the contribution. In return, you get ETF shares without triggering capital gains.

The mechanics are quirky—these can only happen at ETF launch, so opportunities are limited. But the end result is straightforward: you swap your old holdings (concentrated stock plus diversified assets) for ETF shares that can be traded like any other ETF, while keeping all your original tax lots and deferring gains.

Fees vary by sponsor but are often competitive (15–25 bps for broad-based products). Minimums are usually around $1M in total assets, though some providers will work with smaller accounts.

Bottom line: a way to turn a mix of concentrated and diversified holdings into a single ETF with tax deferral, but only available at ETF launch and with strict diversification rules.

Timestamped Youtube Video Link to the section on 351 Exchanges.

Wrapping It Up

At the end of the day, all these strategies—from tax loss harvesting to exchange funds to 351 exchanges—should be compared against the simplest benchmark: just sell, pay the taxes, and move on. That option may not always feel sexy, but it’s often the cleanest.

The more advanced tools can make sense depending on your situation, your appetite for complexity, and your long-term goals. The key is to know what’s out there so that you understand the trade-offs.

If this conversation was helpful, check out the full episode of The Not Advice Podcast on YouTube, Apple Podcasts, or Spotify. And if you like what we’re doing, subscribing or leaving a quick review goes a long way in helping us keep building this for the FAANG FIRE community.

What are your thoughts on some of these more advanced strategies? Do you want to hear more about how I am thinking about managing my own concentrated position?

If so, you have a unique opportunity to save more than $100k into Roth accounts this year.

The key to unlocking this opportunity is to understand how 401k limits work.

It can mean the difference between saving $70k in your 401k or $140k. That is a lot of tax advantaged goodness to leave on the table.

The 401k Rules to Understand

All of you brilliant FAANGFIRE readers understand that in 2025 you are able to contribute $70,000 into your 401k thanks to all FAANG workers having access to after-tax 401k contributions aka the mega backdoor roth.

For example, a Meta or Google employee’s 2025 401k contributions would break down as shown in the image below.

• $23,500 Employee Deferral (Pre-Tax or Roth)

• $11,750 Employer Match

• $34,750 After-Tax with In-Plan Conversion to Roth

As an employee you are able to contribute up to $23,500 across either Pre-Tax and/or Roth 401k while the overall limit when you include your employer match is $70,000.

This is all fairly standard stuff at this point. Many of you are already doing this.

Let’s Dig Into the Underlying Rules a Little More

• $23,500 is the annual limit an employee can contribute towards elective deferrals (doesn’t include After-Tax) for the entire year.

• $70,000 is a limit at the employee AND company pair level.

In simple English: If you work at multiple companies in a single year, you have multiple opportunities to contribute $70,000 into each plan.

Let’s Break Down the Types of Contributions according to the IRS

IRS: Employee Elective Deferrals “you aggregate all elective deferrals you made to all plans”.

Translation: The $23,500 you elect (whether pre-tax or roth) applies across all 401k plans you are part of.

IRS: Total annual contributions to all your accounts in plans maintained by one employer are limited to… $70,000.

Translation: Every employer you work for has a separate $70,000 overall limit to your 401k.

This means that when you switch jobs mid-year, you could contribute a theoretical $140k into your 401k.

• Job 1: $70,000

  • $23,500 Pre-Tax Employee Deferral

  • $11,750 Employer Match

  • $34,750 After-Tax with in-plan conversion to Roth (mega backdoor roth)

• Job 2: $70,000

  • $0 Pre-Tax Employee Deferral

  • $0 Employer Match

  • $70,000 After-Tax with in-plan conversion to Roth

Additional Resources from Kitces, and White Coat Investor on the topic.

Notes:

1. Companies often have their own plan limits. Meta, for example, limits After-Tax contributions to $34,750

2. If you have side income, you can contribute an incremental $70k (see below)

   ---

A More Optimized 401k Contribution Plan

In the original scenario the employee missed out on their Job 2’s employer 401k match because they had already contributed $23,500 to Job 1’s Pre-Tax Employee Deferral. If you know you are switching jobs, you could strategically only contribute enough to get the full match at Job 1 to allow yourself to still get the match at Job 2.

Example Scenario: Hass is a senior engineer at Meta who is joining Uber in Q4.

Let’s walk through the different ways Hass could approach optimizing their 401k contributions.

Level 1: $70,000 Contributed ($23,500 Employee Contributions, $11,750 Meta Employer Match, $34,750 After-Tax)

In level 1 Hass fully maxed out their 401k while at Meta. They are awesome. They think that their 401k is being fully maxed out for the year. So when Hass joins Uber they end up waiting until 2026 to contribute more to their 401k.

Level 2: $140,000 Contributed ($23,500 Employee Contributions, $11,750 Meta Employer Match, $34,750 After-Tax at Meta, $70,000 After-Tax at Uber)

Hass is a badass FAANGFIRE subscriber. They know that the $70,000 401k limit applies to each company plan they are part of. So they fully max out their 401k while at Meta with $70,000 and then when they join Uber, Hass contributes $70,000 directly into the After-Tax at Uber*.

*Uber’s maximum contribution per paycheck to their After-Tax is currently 45% which could make it difficult for Hass to reach the full $70,000 depending on when they joined during the year.

Level 3 $140,000 Contributed ($11,750 Employee Contribution at Meta, $11,750 Meta Employer Match, $34,750 After-Tax at Meta, $11,750 Employee Contribution at Uber, $8,000 Uber Employer Match, $50,250 After-Tax at Uber)

Hass has incredible planning skills and a deep understanding of both Uber’s and Meta’s 401k. They were able to milk every single free employer contribution. So while Level 2 and 3 both result in $140k in Hass’s 401k, in Level 3 $8,000 of that is from the company. Which means Hass would have an extra $8,000 to invest in their taxable portfolio (or spend on avocados).

Notes:

1. There is nuance depending on the specific companies’ 401k plans. For example at Meta you can contribute $11,750 and receive the full match of $11,750 instantly. While at Google, they contribute 50% up to a total contribution of $11,750. So the only way to get the full Google match is to contribute $23,500 in employee contributions into your Google plan.

2. It is sometimes possible to get Job 1 to do a withdrawal of excess contributions to make room for you to contribute to Job 2’s 401k and receive the match. However the success of this has been very hit or miss. The company isn’t obligated to do this and if you overcontribute, you can end up paying taxes on the overcontribution twice.

   ---

FAANG + Side Hustle Income

Level Hustle: $140,000 Contributed ($23,500 Employee Contributions, $11,750 Meta Employer Match, $34,750 After-Tax, $20,445 Solo Employer Contributions, $49,555 After-Tax)

Hass is somehow working full time at Meta and also bringing in $120k selling Avocado NFTs. Hass is now able to contribute $70,000 into their Solo 401k in addition to the $70,000 they contributed to the Meta plan.

Just like how someone with two jobs in the same year can contribute $70,000 into two separate company 401ks. When you have your own business, you can do the same thing!

You can still only contribute $23,500 in elective deferrals to your pre-tax or Roth 401(k). However, what's unique about having your own 401(k) for your side hustle is that you may be able to also contribute on behalf of the employer (aka also you).

For Employer Contributions, Sole Proprietors and Single-Member LLCs can contribute up to 20% of your net self-employment income (net profit minus half of self-employment tax). This is why Hass is able to contribute $20,445 in employer contributions into their Solo 401k.

I personally use Carry Money for my Solo 401k. I would definitely recommend Carry Money for anyone with a side hustle or your own business. There is a $299 annual fee, but they helped me receive a $500 tax credit as part of the Secure 2.0 Act, which I’ll also get the next two years. They were one of the few places that made it easy to set up mega backdoor roth contributions and it is so nice using a website that wasn’t created in 1995.

They are also FAANG FIRE partners, if you become a FAANG FIRE “Extra Guac” member, new Carry subscribers receive their 1st year free!

This email isn’t sponsored, but I may receive an affiliate commission if you sign up through my link. This helps FAANG FIRE generate a profit so I can contribute back into my Carry Money account while also keeping FAANG FIRE free.

Learn More About Carry Money

What do you think? Have you contributed to multiple 401ks in the same year? What is your strategy?

• Level 1: A household net worth of less than $10,000

• Level 2: A household net worth between $10,000 and $100,000

• Level 3: A household net worth between $100,000 and $1 million

• Level 4: A household net worth between $1 million and $10 million

• Level 5: A household net worth between $10 million and $100 million

• Level 6: A household net worth over $100 million

If I look at the data from the FAANG FIRE Audience Survey, more than 60% of you are in the Level 4 bucket and 5% in Level 5!

I feel like Level 4 here must have sublevels within it, particularly for the FAANG FIRE crowd. A household net worth of $1M seems drastically different than a net worth of $9.9M. What about a 25 year old with $1M vs a 70 year old with $1M?

I wish I could talk to the author… oh wait.

Live Interview with Nick Maggiulli on Thursday

Tune in this Thursday at 11am PST for the live episode 3 of the Not Advice podcast featuring special guest Nick Maggiulli.

The Wealth Ladder Review

Nick Maggiulli is one of my favorite financial writers. His blog Of Dollars and Data blends data and wisdom better than anyone.

/end fangirling

The Wealth Ladder breaks down (with data) each step of the ladder that Nick defined.

One recurring theme Nick really emphasizes is that income is the primary tool to climb the wealth ladder. Household annual income increasing with household wealth is one of the strongest relationships in all of personal finance.

However, based on the data, income alone rarely gets you to the $10M mark needed to reach Level 5. The most common characteristic in those within Level 5 and beyond is business ownership.

Nick claims that it is unlikely you’ll get to Level 5 through a W2 job alone.

This is one area that I think a dual income FAANG household could be the exception. The $10M threshold would still be rare, but the last few years of RSU appreciation pushing up total compensation have made Level 5 as a W2 big-tech worker a distinct possibility.

The book makes it clear that it requires a very high income and very high levels of annual savings.

The 0.01% Rule

He also introduced a few new rules of thumb that I really liked.

The 0.01% Rule: If your wealth is invested and growing by 0.01% per day (5% annually) above inflation, you could spend that amount each day and maintain the same net worth.

$2,000,000 net worth x 0.01% = $200 per day while maintaining the same net worth.

One reason I liked this was that if you do the math the 0.01% daily spend actually ladders up pretty closely to my personal 3.5% safe withdrawal rate I use to calculate my enough number.

FAANG and “Skipping Levels”

Normally, households progress through the wealth ladder step by step, building the skills needed to manage the money you have at each stage.

The book brings up another interesting exception, what happens when you reach Level 5 through a single liquidity event? It would be entirely possible to be in Level 5 while still having no idea how to save or manage money.

I think this concept of skipping levels is fascinating and actually could apply to those in FAANG who have seen their compensation drastically increase due to RSU and equity appreciation over the last couple of years.

You can now have a high net worth, but you skipped all the levels to get there. This means you need to be investing in doing the work needed to ensure that you know how to properly save that money, use that money, and leverage that money to help get you to your financial goals.

"With all the new amenities available to those in level 5, it can be easy to overspend if you aren't careful.”

Stuck in Level 4

He also introduces how as you progress within Level 4 you can feel stuck… because you kind of are.

I recommend checking out the Wealth Ladder and tuning into our interview with Nick this Thursday on LinkedIn.

Can’t make the LinkedIn Live? Don’t worry, the Not Advice Podcast is now available on Apple Podcasts and Spotify! Listen to our first two episodes and subscribe to be alerted when the recording of episode 3 goes live. Show us some love by dropping a rating and review.

What are your thoughts on Nick’s Wealth Ladder Levels?

(This post is specific to US Public company RSUs).

RSUs are taxed as income the moment they vest, whether you sell or hold. This means that at the moment of vest, if you sell your newly vested RSUs, you will only pay additional taxes if the stock price is now higher than the vest price, and in most cases it will be minimal in the days after vest.

But how are shares from past RSUs taxed?

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What about Capital Gains?

If the stock price goes up after vesting, you’ll also owe capital gains taxes when you sell. Only on the gain! So if the stock vested for $700 and you sold for $700, you would owe $0 in capital gains taxes. If the stock increased to $705, you would only owe capital gains taxes on the $5 of gain! How much though?

Short Term Gains vs Long Term Gains?

Short-term capital gains (held <1 year) are taxed at your ordinary income rate. Long-term gains (held >1 year) get lower rates, 15% if you’re under $533k single / $600k married, 20% above that, plus the 3.8% net investment income tax if you’re over $200k single / $250k married. States add their own layer: California taxes all gains as ordinary income, while Washington only taxes long-term gains above ~$270k.

Individual Tax Lots

Every vest creates a new tax lot with its own cost basis. Some lots will have short-term gains or losses, others long-term. The right decision isn’t always “sell long-term first”, it really depends on the specific tax impact of each lot.

When you go to sell your company's stock, you can actually choose which lots you sell. This is often referred to as selecting the cost basis method for the specific order. By default, it is often first-in-first-out (FIFO), which means by default it will sell your oldest shares first. This can often be the worst option from a tax perspective!

Most brokers have tools like Schwab’s Tax Lot Optimizer:

Tax Lot Optimizer (or your broker’s equivalent), is often a great place to start.

However, what I like to do is export my lots into Google Sheets and calculate the tax impact myself, factoring in state taxes. That way I know exactly what each sale will cost and can prepare for the bill come April.

One metric I track is the tax impact per share, and in the next section I’ll walk you through exactly how to calculate it.

Tax Impact Per Share

Tax Impact Per Share is calculated by dividing the estimated taxes for a lot of shares by the number of shares in the lot. When I go through to select which lots to sell, I simply sort by Tax Impact Per Share lowest to highest.

I have a very rough Google Sheet you can use as a starting point at the end of this doc and I’ll even write the instructions below in a way that ChatGPT 5 can probably 1 shot an app to do this for you.

Disclaimer: This is for educational purposes only. Please consult a tax or financial professional for accurate calculations. Don’t sue Andre.

Calculation Examples

For the following calculations I am going to use the following assumptions:

• Current Date: 8/8/2025

• Current META Stock Price: $761.83

• Marginal Federal Tax Rate: 35%

• Long Term Capital Gains Tax Rate: 20%

• Other Short Term Taxes: 3.8% NIIT which applies to both short term and long term gains, can be modified to add Short Term State Tax Rates

• Other Long Term Taxes: 3.8% NIIT which applies to both short term and long term gains, can be modified to add Long Term State Tax Rates

Short Term Lot Example

• Stock Ticker: META

• Vest Date: 5/15/2025

• Quantity: 100

• Cost Basis Per Share: $659.36

Calculations (rounded below for simplification):

• Current Value: $76,183 (Current Stock Price x Quantity; 100 x $761.83)

• Gain/Loss: $10,247 (Current Value - (Cost Basis Per Share x Quantity)); $76,183 - (100 x $659.36))

• Holding Period: Short Term (simplified: if Current Date - Vest Date <=365 then Short Term)

• Tax Estimate: $3,976 ( If the Gain/Loss is >0 then multiply the Gain either all Short Term or all Long Term taxes; $10,247 x (35% + 3.8%)

• After Tax Proceeds: $72,207 (Current Value - Tax Estimate, $76,183 - $3,976)

• Tax Impact Per Share: $40 (Tax Estimate / Quantity, $3,976 / 100)

Let’s calculate this for every Meta RSU vest since August 2022:

As you can see, the “Tax Impact Per Share” in this case is positive for all lots! With the current lowest being the 2/15/2025 vests that have a cost basis of $736.67. Which gets taxed at Short Term Capital Gains rates, and still results in a lower tax impact per share than any of the Long Term shares.

Ok, here is the link to make a copy of the spreadsheet. Warning, this is very janky.

Copy V0 Janky Spreadsheet

When Do You Pay Capital Gains Taxes?

Taxes on capital gains are not typically withheld/paid to the IRS automatically. Each broker will issue you a 1099 at the end of January that includes all the capital gains and losses you had over the prior year. You’ll use this form when you file your taxes in April of the following year. This is why I think it’s important to estimate your capital gains taxes throughout the year so you can prepare for any potential bill.

Offsetting Capital Gains with Capital Losses

This is also where having accumulated losses from strategies such as direct indexing or long short direct indexing can come into play. Any capital losses you have are used to offset capital gains. If you have more losses than gains, then you can use those losses to reduce your taxable income by $3,000 before the rest of the losses are carried forward into future years.

For example if you have accumulated $10,000 in losses and have $10,000 in gains, the net capital gains for the year would be $0 and there wouldn’t be any additional federal tax obligation.

Washington State Note: At the federal level short term losses can be used to offset long term gains. In Washington that isn’t the case. Only long term losses can offset long term gains, and short term gains aren’t taxed at the state level.

Interested in learning more about how tax loss harvesting with direct indexing and long short direct indexing with factor tilts work?

Join us for a FIREside chat this week with the CEO, Mo Al Adham, on August 13th at 12pm PST. Registered here: https://lu.ma/dx6nomhv

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Don’t Let The Tax Tail Wag The Dog

You shouldn’t only focus on taxes when it comes to selling RSUs. I would first determine how many of your RSUs you want to sell, and THEN go about determining the most tax efficient way to sell those shares.

Calculating the Tax Impact Per Share is just one small piece of an effective strategy around dealing with RSUs. I do think it is an important piece of information to understand. Too many people state a nebulous “I am not selling because of taxes” excuse to ignoring their RSU vests. By calculating the Tax Impact Per Share at least you can quantify it.

Disclosure: I am a Frec client and Frec paid a one time fee for the upcoming webinar. Investing involves risks, including the risk of loss. Long short strategy will add to your risk.

Read about how I personally use Frec in my original direct indexing article and 6-month follow up.

I wanted to announce The Not Advice Podcast that I'm co-hosting with Brent Sullivan. Episode 2 will be streamed live Thursday, August 7th at 11am PST on LinkedIn.

RSVP Here

Not Advice Podcast Details

Not Advice, where the disclaimer is in the name, is a joint production between me (Andre/FAANG FIRE) and Brent Sullivan of Tax Alpha Insider.

What is the podcast about?

At the heart of Not Advice are two people who enjoy nerding out on RSUs, Equity, Concentrated Stock Positions, Tax Aware Investing, FIRE, and Avocados.

You can expect episodes centered around those topics as well as the occasional guest host!

Where to Listen/Watch

• Episode 1 Recording on LinkedIn: RSU Vesting and Taxation

• Episode 2 Streaming Thursday August 7th (recording available after stream): Hold Too Much Company Stock?

Can I watch/listen somewhere that isn’t LinkedIn?

• Apple Podcasts

• Spotify

• Youtube

Tune in and let me know what you think!

Fine I'll RSVP!

Interested in Sponsoring The Not Advice Podcast?

Now that all the consumer focused stuff is out of the way. This podcast is actually a ploy for Brent and I to get rich off that sweet sweet podcast money. Kidding. However, if you are interested in reaching the extremely niche FAANG FIRE and Tax Alpha Insider audience, we are looking for sponsors to help offset our production costs. This will accelerate our timeline of streaming live to syndicated podcast + YouTube.

Reach out to notadvice@faangfire.com for more details.

From all of us at FAANG FIRE, we wanted to wish you and your loved ones a heartfelt Happy Triple Paycheck Month.

May your 401k contributions be blessed and your excess cashflow be allocated appropriately towards your goals.

No idea what I’m talking about?

A bi-weekly pay schedule results in 26 pay periods per year. This means that there are typically 2 months per year where a FAANG employee will receive 3 paychecks! Since humans are creatures of habit, we tend to mentally budget based on two paychecks per month. So the “Triple Paycheck Months” can sometimes make it easier to save those “extra” paychecks.

If you get paid bi-weekly but don’t have a triple paycheck month this month, your special month will be October.

Not all FAANG! Looking at you, Amazon. Washington based Amazon employees don’t get to celebrate. With their monthly pay schedule, triple paycheck months don’t exist.

I remember triple paycheck months fondly. I now celebrate vicariously through others. All my household has are the boring and predictable Uber paychecks on the 15th and last day of the month.

Does it actually change anything?

No, not actually. You will still have the same annual comp. Although, there is the occasional year where there are 27 pay periods in a calendar year! How your payroll provider deals with that can vary. When it happened while I was at Meta, we simply received one more paycheck that year, granting everyone a one-time 3.8% raise that they probably didn’t even notice. I noticed! Thank you, payroll person who decided that.

More Next Week

According to my trusty painter’s tape, all of FAANG has now had their earnings. I’ll have more to say next week, but I think I can hold off on any more wash sale + RSU posts for a few months.

I also want to remind everyone of all the RSU resources that are available on FAANG FIRE:

Still have RSU questions? Ask away!

Subscribe now

Hey FAANG FIRE!

Backdoor Roth IRAs are great.

In my cashflow prioritization waterfall I have the Backdoor Roth just behind the Mega-Backdoor Roth.

The Backdoor Roth allows high income earners to get an additional $7,000 per year into their Roth IRAs, where the funds and any growth will not be taxed when they tap into the account in retirement.

If you have already maxed out your full 401k, all $70,000, the $7,000 you can contribute into a Backdoor Roth IRA is a nice cherry on top before you start building up your taxable brokerage account.

There is one major issue that tends to get everyone tripped up though, the pro-rata rule. I wanted to dive into the specifics of the pro-rata rule to help y’all understand why it causes issues.

Posts about Roth IRAs will typically say something like "If you want to contribute to a backdoor roth, make sure you don't have any funds in a Traditional IRA or Rollover IRA due to the pro rata rule. An easy way to do this, is to roll your Rollover IRA or Traditional IRA into your current workplace 401k." In fact I said exactly that in my entire guide walking through the entire backdoor roth process.

I realized that this still glosses over the "why". Leading to confusion and a tendency to overcomplicate things.

Let’s fix that so we can all understand.

Disclaimer: There is a lot of nuance. It is always a good idea to consult a tax professional.

First, A Recap on the Backdoor Roth:

• A Roth IRA is a tax-advantaged account where after-tax funds can grow tax free and be withdrawn tax free in retirement.

• In 2025 the contribution limit is $7,000.

• If you earn more than $150k single or $236k married you can’t contribute directly to a Roth IRA.

• A “Backdoor” Roth IRA involves making a nondeductible contribution to a traditional ira and then converting those funds into a Roth IRA.

• This allows high earners to effectively fund $7,000 per year into a Roth IRA despite any income limits on direct contributions by going through the backdoor of a traditional ira.

• The important caveat is that you want to make sure you have $0 in all traditional ira and rollover ira accounts by the end of the year or else you will be subject to the “pro rata rule”.

Again, I have a full walkthrough of the backdoor roth ira process including dealing with existing rollover iras available:

Pro Rata In More Detail

Let’s address the Pro-Rata Rule. What is so painful about the Pro-Rata rule that makes it not worth doing the Backdoor Roth?

Instead of an explanation, let’s walk through an example:

Brandon hits the pro-rata rule

• Let's say in 2024 Brandon has $500,000 in a rollover ira from a past employer. He heard about this "back door roth" thing and created a new traditional ira, contributed $7,000 and then converted it to a Roth IRA.

• Then in April 2025 Brandon is doing his taxes and is greeted with not so fun surprise.

• Instead of the $7,000 of After-Tax funds being converted into a Roth IRA, tax free he seems to have accidentally created a more than $2,400 tax bill.

• This is the day Brandon learns about the Pro Rata Rule.

Instead of that $7,000 being converted into a Roth IRA tax free, nearly all of it was taxed!

The Pro-Rata Math Broken Down

The IRS wants you to "pro rate" the conversion across all your traditional ira and rollover ira accounts. This only applies to pre-tax IRA accounts, not 401ks.

The Math Behind Brandon’s Tax Bill:

• Total Balance Across All Pre-Tax IRA Accounts: $500,000 + $7,000 = $507,000

• Prorated Percent Converted: 1 - ($7,000/$507,000) = 98.6%

• Taxable conversion: 0.986 * $7,000 = $6,902

• Federal Tax Bill: Marginal Tax Rate * $6,902 (which is 35% federally or more if Brandon has an adjusted gross income of more than $250k and is single)

So $6,902 out of the $7,000 Brandon converted is going to be coming from the pre-tax funds in his Rollover IRA causing the $6,902 to be taxed at his current marginal tax rate! That could be >$2,400 in taxes at the federal level alone!

My non-CPA attempt to show how this would look on Brandon’s actual tax forms.

Avoiding the Pro-Rata Rule:

Brandon’s entire tax bill could have been avoided if he simply moved all of his prior rollover ira funds into his workplace 401k before the end of the year!

Let me repeat that. You want to end the calendar year with a $0 balance in all Traditional and Rollover IRAs by the end of the year to avoid the pro-rata rule.

This is a simplified example. But hopefully you now understand the pro-rata just a little bit more.

In this example, Brandon technically still has $6,902 of After-Tax funds in your Traditional IRA. He should still be able to move those funds into his ROTH IRA, assuming he finally moves that rollover IRA into his employer 401k.

If this has happened to you, don’t beat yourself up about it. It is a very common mistake! On the bright side, you essentially just did a normal Roth Conversion on those funds. You won’t ever have to pay taxes on the rolled over amount. Most people just wait until they are not in FAANG employee tax brackets before they do that :).

As always, it is a good idea to talk to a tax professional who can discuss your specific situation.

What if you have a rollover ira but don’t have a current employer 401k?

In order to contribute to a Backdoor Roth IRA you need earned income. If you have earned income from earlier in the year or income from your personal entrepreneurial endeavors there is still a way. Since you don’t have a current employer 401k, you can look into a Solo 401k as a potential option.

By opening a Solo 401k, you now would have an account you can move your Rollover IRA funds into before the end of the year. I would not wait until the end of the year to do this since it can take a little bit of time. I personally use Carry (affiliate link) for my own Solo 401k since they were one of the few providers that made it easy to also contribute to a Mega Backdoor Roth IRA. You can also get a free year of Carry by joining the Extra Guac tier, instantly paying for itself.

Proof I actually use and personally pay for Carry:

Congrats, you now understand the pro-rata rule more than 98% of FAANG employees. It is a very fun party conversation :).

While we are on the topic of Backdoor Roth IRAs, I would be remiss to call out one of the most common tax mistakes of incorrectly entering a Backdoor Roth IRA even when you are not dealing with the pro-rata rule. I wrote on that topic when discussing the Holy Trinity of Common Tax Filing Mistakes.

-Andre