Your Microsoft Benefits & Career: Financial Planning for Employees & Executives
Do you work at Microsoft? Get the resources you need and expert insights from financial professionals who specialize in helping Microsoft employees make the most of their compensation package and benefits.
Whether you’re a new Microsoft employee or you’ve moved up the ranks into a management or executive leadership role over a multi-year career, it’s important to make smart money moves with your income and employee benefits. For example:
✅ Do you know the right moves to make to get the greatest value from the Microsoft benefits available to you?
✅If you’re thinking about leaving Microsoft for another job or planning to retire from the company in a few years, are you taking the right steps today to ensure you will receive all of the compensation and benefits that you’ve earned?
Get the Most Value from Your Microsoft Benefits and Compensation Package
Throughout the year, Microsoft provides its employees and executives with updates about their benefits ranging from health insurance and health savings plans to retirement plans like a 401(k), deferred compensation plans, and stock options. While the company offers many useful resources and access to knowledgeable staff who can assist with questions, you’ll also find financial professionals not affiliated with Microsoft who specialize in helping Microsoft employees make the most of their income and benefits.
Whether you work in the Microsoft headquarters in Redmond, Washington, another office location around the country, or remotely from home, you may have questions about your compensation package and benefits better suited for a financial professional who can offer unbiased advice and guidance.
For example, sensitive topics like discussing the steps you should take before quitting your job at Microsoft to work elsewhere, protecting yourself in advance of a corporate layoff, or deciding when you should plan to retire are all conversations that may be more comfortable with a trusted financial advisor.
Q&A: Financial Planning Tips For Microsoft Employees & Executives
Answers to Microsoft Employee Questions with Emily Rassam and Richard Archer (Archer Investment Management)
With a focus on serving professionals in the technology industry, the financial advisors at Archer Investment Management help their clients get the most value from their benefits and compensation package so they can enjoy life and feel confident about their financial future. Based in Charlotte, North Carolina, and Austin, Texas, respectively, Emily Rassam and Richard Archer specialize in offering financial planning services to Microsoft employees.
Q: As a financial advisor with experience helping Microsoft employees save for their retirement, how do you help them make the most of their employee benefits?
Emily: At Archer Investment Management, we specialize in working with mid-career technology professionals. We have several Microsoft employees as clients and are familiar with the company’s employee benefit plans, retirement plans, equity compensation packages, and ancillary benefits. More importantly, we are acutely aware of the financial planning needs of technology professionals and how their Microsoft benefits fit into an overall financial plan, including long-term planning, goal setting, tax planning, and estate planning. We start by building a financial personality profile and risk tolerance assessment to understand your relationship with money and your comfort level with risk.
Q: When you first speak with a Microsoft employee, what questions do you like to ask to better understand their unique circumstances and determine how you can best help them achieve their goals?
Richard: Our detailed onboarding process includes conversations about your life goals, how your finances play a role in maximizing happiness, and what it means to be intentional with money. We gather information about your benefits and compensation package, spending plan, short-term and long-term goals, taxes, estate plans, and insurance. This detailed planning process allows us to build a comprehensive picture of your financial life and how each piece of the puzzle fits together. You cannot make recommendations without examining the whole picture.
Q: Is there a particular benefit available to Microsoft employees you feel isn’t as well utilized or understood by employees as it should be?
Richard: The opportunity to do a Mega Backdoor Roth Conversion with after-tax 401(k) dollars is regularly underutilized. Employees often focus on contributing to their pre-tax or Roth 401(k) without realizing the power of after-tax contributions that can be converted to a Roth as soon as the contribution is made. The Mega Backdoor Roth Conversion strategy can be a way to fast-track your journey to financial independence.
Q: Beyond Microsoft employee benefits for retirement savings, are there other types of benefits offered by the company that you find valuable to discuss with your clients (e.g., stock, education savings, health savings)?
Emily: Microsoft offers an Employee Stock Purchase Plan (ESPP) within which they can receive a 10% discount on Microsoft stock. Employees at Level 67 or higher have a great opportunity to defer part of their bonus and salary and use vesting Restricted Stock Units (RSUs) as cash flow. A nice perk that employees may miss is the $1,500/year reimbursement for wellness-related expenses.
We applaud Microsoft for offering generous parental leave including 20 weeks of paid time away for mothers and 12 weeks of fully paid parental leave for all other new parents, including adoptions and foster placements. Fully paid family leave is also available for up to twelve weeks if an immediate family member is diagnosed with a serious health condition and requires care.
Get to Know Emily Rassam, Financial Advisor for Microsoft Employees:
Q: For Microsoft employees thinking about leaving the company to accept a job elsewhere, what actions do you recommend they take before resigning and shortly thereafter?
Emily: Your matched 401(k) dollars are 100% vested from day one. However, you may have received employee stock options or RSUs that are unvested. Look carefully at the dates on your grants and vesting schedules to determine when each RSU grant vests; this may impact your timing to leave Microsoft – you don’t want to leave any money on the table! You have 90 days after departing the company to exercise your stock options. Work with an advisor to determine which grants to exercise and the best way to fund this purchase.
Q: For Microsoft employees approaching retirement age, how do you recommend they prepare to make the transition from living off their salary to relying upon other sources of income?
Richard: Our detailed retirement planning process includes:
- A spending strategy tailored to your income goals
- Social Security timing recommendations
- Coordination of health care benefits
- Discussion around how your spending will change throughout retirement
- Stress-testing your retirement projection with many what-if scenarios
- Timing your exit to maximize any unvested incentive stock options (ISOs), non-qualified stock options (NSOs), or RSUs
Q: For Microsoft employees who have managed their finances on their own to this point, what would you suggest they consider to help them decide if they should begin working with a financial advisor at this stage in their lives?
Emily: There are many online tools and calculators. Where we find Microsoft employees get stuck is understanding how to prioritize goals and seeing the big picture. We help Microsoft employees organize their financial lives and provide accountability for reaching goals. Understanding whether you should use surplus dollars to pay down debt, save towards a short-term goal, or work towards a long-term aspiration (such as retirement or college education savings) can be challenging. For Microsoft employees planning with a spouse or partner, an advisor helps facilitate difficult conversations and moves the ball forward in your planning process.
Q: What are some of the unique financial planning challenges you commonly see among your clients who are Microsoft employees and how do you help them overcome these obstacles?
Richard: One common obstacle we find is knowing when to diversify away from the concentration risk of holding a high percentage of your net worth in one company’s shares. Many of our Microsoft employee clients struggle with selling positions; it requires coaching, recognizing natural human biases, an evaluation of the risks, and careful diversification away from an outsized position.
Get to Know Richard Archer, Financial Advisor for Microsoft Employees:
Q: What questions do you recommend Microsoft employees ask financial advisors they’re considering hiring to help them decide if they’re a good fit?
Richard: If you were granted ISOs or RSUs, be sure to work with an advisor who understands how to incorporate those into your overall picture. Seek an advisor who can model the alternative minimum tax (AMT), understands the rules around qualifying and disqualifying dispositions, and knows how and when to diversify away from sizeable single stock positions, if appropriate.
Q: Is there anything that comes up frequently in your initial meeting with Microsoft employees that surprises you?
Richard: Employees don’t always understand the full realm of benefits – both big and small – available to them. Be sure to carefully review the benefits available to you! For some employees, this may be the first time they have received an equity compensation package. They often need our guidance to fully understand the type of grant they received and potential tax impacts. We enjoy helping people with strategies to ensure they fully benefit from their entire compensation package.
Q: For highly compensated Microsoft employees and executives, are there any special benefits you believe it’s important to take into consideration when preparing their financial plan?
Emily: The Microsoft Deferred Compensation Plan (DCP) is available to employees at Level 67 or higher. This enables employees to save and invest up to 100% of their annual cash bonus and up to 75% of their salary. Importantly, contributions to the DCP reduce your annual taxable income. By reviewing the full picture of your salary, bonus, and equity compensation, we can identify key strategies to help you maximize the DCP benefit.
Q: Is there a particularly memorable experience or a moment you recall with a client who worked at Microsoft when you realized they have unique opportunities and circumstances when it comes to their financial planning needs?
Emily: One of our clients is an executive at Microsoft, and he was unfamiliar with the after-tax savings and daily Mega Backdoor Roth Conversion opportunities. We reviewed the plan documents and rules to guide him during the enrollment process and showed him how to use ongoing vesting RSUs for cash flow while maximizing after-tax savings to quickly build his Roth accounts. The executive and his wife are in their 50s, and the strategy was especially beneficial for their goal of retiring early in a lower tax bracket. We have also helped our clients utilize the College Coach program which helps parents navigate through college admissions and financial aid processes.