easy · Certified Financial Planner Risk Management
A planner is reviewing Jablonski's 401(k) and notices it contains employer stock with a cost basis of $120,000 and a fair market value of $150,000.
Based on the 'NUA Bottleneck' heuristic, why might the planner recommend against a Net Unrealized Appreciation (NUA) strategy?
- The employer stock has not appreciated enough
- The cost basis is too high relative to the total value
- The client is not yet age 59 1/2
- The pro-rata rule requires aggregation with other IRAs
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