Ready For Retirement
Ready For Retirement
Work at SpaceX? Watch This Before your IPO
If you work at SpaceX, you’re likely holding one of the most valuable (and complicated) assets in the world. With a potential IPO on the horizon, the decisions you make with your SpaceX stock, RSUs, and equity compensation could determine whether that wealth creates freedom or long-term stress.
Instead of starting with “What should I do with my stock?”, James explains why the first question has to be “What do I want my life to look like?” Without that clarity, selling, holding, or diversifying SpaceX stock becomes guesswork... even if the company continues to perform well.
Using a detailed case study that closely mirrors the financial reality of many SpaceX employees, James shows how it’s possible to be worth millions on paper and still feel financially constrained. When the majority of wealth is tied up in illiquid company stock, day-to-day flexibility, retirement timing, and peace of mind can all feel out of reach, even with enormous upside ahead.
The focus isn’t on predicting SpaceX’s future valuation. It’s on using equity intentionally. James walks through how taking enough chips off the table (not all of them) can lock in early retirement, reduce risk, and create optionality, while still allowing participation in future upside. He covers diversification, tax planning, liquidity decisions, charitable strategies, and why “retiring early” is less about stopping work and more about becoming financially independent.
For SpaceX employees approaching liquidity events, vesting milestones, or long-term career decisions, this is a framework for turning concentrated stock into a life with more control — instead of deferring freedom while waiting for a perfect outcome.
If you work at SpaceX and want your stock to support the life you actually want to live, this perspective changes how every decision gets made.
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Advisory services are offered through Root Financial Partners, LLC, an SEC-registered investment adviser. This content is intended for informational and educational purposes only and should not be considered personalized investment, tax, or legal advice. Viewing this content does not create an advisory relationship. We do not provide tax preparation or legal services. Always consult an investment, tax or legal professional regarding your specific situation.
The strategies, case studies, and examples discussed may not be suitable for everyone. They are hypothetical and for illustrative and educational purposes only. They do not reflect actual client results and are not guarantees of future performance. All investments involve risk, including the potential loss of principal.
Comments reflect the views of individual users and do not necessarily represent the views of Root Financial. They are not verified, may not be accurate, and should not be considered testimonials or endorsements
Participation in the Retirement Planning Academy or Early Retirement Academy does not create an advisory relationship with Root Financial. These programs are educational in nature and are not a substitute for personalized financial advice. Advisory services are offered only under a written agreement with Root Financial.
Create Your Custom Strategy ⬇️
If you work at SpaceX, then you are sitting on one of the most valuable assets in the world. And with an IPO likely in 2026, the decisions you make this year could permanently impact your freedom or your stress for years to come. But here's the problem. Most SpaceX employees ask the wrong question first. They ask, what should I do with my stock? It's not a bad question, but the first question should always be, what do I want my life to look like? What outcome am I trying to create here? Because once you know that, then you can work backwards. But if you don't know that first, any decision is just a guess. So here's why this video matters. SpaceX stock is a powerful asset, but if you don't have direction in the decision that you are making, you're going to squander this opportunity. But if you use this stock and if you combine it with a clear plan for how you can hit your early retirement goals, for how you can create the outcome that you want, this may be one of the most valuable assets you ever have. So in this video, I'm going to help show you how you can work backwards from the life that you want to determine what should you do with your stock, meaning how much should you sell, how much should you keep, what tax strategy should you employ? What investment strategies should you do? How do you use this stock to purchase the house, to retire early, to send kids to college, whatever your goals might be. But to start, let's talk about what do you want your life to look like? Do you want to downsize to part-time work or to passion work? Do you want to take more career risk without any fear of what might go wrong? Or do you just simply want to be in a position where you never have to worry about your paycheck ever again? Now, all of these things are what happen when you pursue and accomplish early retirement. So your early retirement does not mean that you're out of the game. It doesn't mean that you have to stop working. But what it does mean is it means you've turned your assets and your income sources into the ability to be financially independent. And from there on out, every single decision that you make is one that aligns with your life purposes as opposed to just being the thing that makes sense financially. So once you've determined what you want life to look like, here's what comes next for those of you working at SpaceX. Now you can decide with this equity that you have, with this illiquid stock today that you have, how much of that needs to be used to prioritize liquidity versus how much of this needs to be prioritized for tax savings. How much of this can stay invested in SpaceX stock for upside potential versus how much of this do you need to diversify? How much of this should be invested differently versus how much of this drives how your other supplemental accounts should be invested. Let's take a look at a case study. I'm going to show you how life changes when you make this subtle shift to how you view your SpaceX stock. This is Andrew, this is Wendy. These are not real people, but this situation is very similar to a lot of SpaceX stock employees. You can see their assets here,$14 million in SpaceX RSUs, small portion of us in stock options as well. Some money in a SpaceX 401k, over$200,000, but a very small amount relative to how much is in the stock. This is actually very common for SpaceX employees. Because there's no$0.1k match, SpaceX isn't contributing to those. And in many cases, a lot of employees are not contributing to the 401k. Instead of a 401k match, SpaceX has added equity compensation, is a big part of how it attracts and retains and incentivizes employees, and it's paid off in a very big way.$14 million here compared to a relatively small amount in other accounts, although it's being equal. Now, Andrew's initial goal, so Andrew works at SpaceX. Wendy stays home, raises the children. They live in Los Angeles. And even though he makes a good income, they often feel like they're living paycheck to paycheck. Rent in Los Angeles, caring for a family, one spouse staying home, cost of living very high overall. These are all challenges. But Andrew's initial thought was he loves the company, he loves the mission, he sees tremendous upside potential. He doesn't want to liquidate his stock. He wants to keep it because he says, yes, it's$14 million today, but how much more valuable could that be when we continue to execute upon the goals that we have as a company? When they do retire, they don't want to live an incredibly lavish life. They want to live comfortably. They likely want to move out of state where they can get something more affordable, but they want to spend$10,000 per month. Going back to salary today, it's strong, but it still doesn't feel like he has the breathing room to fully live and fully enjoy life because of where they live. Now, here's the reality. He wants to work for another nine years or so. Andrew's 51 years old today, so is Wendy. They want to work until he's 60 because he thinks that's going to be the point at which there's been a ton of appreciation in SpaceX stock. Finally, they can divest, finally, they can live comfortably and do what they want to do in retirement. But here's the reality. Andrew, if you do that, or if you watching do this, there's a huge portfolio left at the end of the day. So sure, maybe you've captured some of the SpaceX stock. And by the way, this is zero guarantee as to what's going to happen with SpaceX stock. I have no idea. The reality is nobody has any idea. This is simply assuming some growth rates of about 8.5% or so while Andrew's still working, and about 6.5% or so in retirement. Not a guarantee, simply an assumption we must make to model anything out in this projection. Now, as we look at this, we can take a big step back and say, well, great. You lived feeling pretty tight financially from age 51 to 60, just so that you could retire and now have an enormous portfolio left when you die. That's not actually the goal that any of us have, if we're going to be honest with ourselves. Andrew, what do you actually want to do? You watching this, what do you actually want to do? What do you want life to look like? Because we have to think of SpaceX stock as the enabler, not as the actual thing that we're pursuing here. And when Andrew and Wendy thought about what they actually wanted, what they actually wanted was freedom. The freedom to do what they wanted to do, the freedom to be able to work how they wanted to work, the freedom to be able to feel less pressure financially. So here's what we did. We said, you know what, you have to retire early. You can stay in the game, you can work for another 20 years if you want to, but you have to take enough chips off the table to be retired early. So what does that do? Well, if they were to do that, if they were to retire at 51 instead of 60, what does that do? It's going to mean there's fewer assets left at the end of their life. But what did they get in exchange? In exchange, they got that freedom they were looking for. In exchange, they're able to start living today, as opposed to pursuing this ever increasing stock valuation and deferring life until it was realized. They were able to make this happen if they retire today. Now, here's the reality. Most of you watching this, if you're a SpaceX employee, you probably believe pretty strongly in what SpaceX is doing. You probably believe pretty strongly that whatever the valuation is today, it'll be higher in the future. So what I'm not telling you to do is to sell everything. You absolutely don't need to sell everything. What you do need to strongly consider is selling enough to retire early. Retire early being more of a mindset than an actual termination of any employment that you do. So how do you solve for that? Because we see that with a full 14 million, Andrew's good here, but he doesn't need the full 14 million. Well, here's what I'm doing. Here's how I would help him plan. I'm gonna say, Andrew, some of this money we need to prioritize just pure liquidity. We need to prioritize this money for you to be able to lock in the life you want. It might not be the most tax advantageous, it's not gonna allow you to keep holding that stock forever, but what it's gonna give you is what you actually want. It's gonna give you peace of mind. It's gonna give you freedom. It's gonna give you the ability to live life on your own terms. With the remainder, though, that's where we don't need to prioritize liquidity. We can prioritize investment potential. So do you keep all that in SpaceX stock? We can prioritize tax strategies. Are there things you can do with this that might tie up your money for a little bit, but it's gonna save you a whole bunch of money in taxes? Or you can prioritize completely spending that money, blowing that money, having fun with that money. So this quote unquote strategy money is simply money I'm taking off the table in Andrew's plan. The reality is it's more than likely gonna grow. The reality is it's more than likely gonna stay in his plan. But just to illustrate to Andrew, how much can we take out of your plan until your plan no longer works? What that helps us do is back into the what is the amount that we need to sell, we need to liquidate to diversify and lock in early retirement. So for example, if I put$3 million in here, what this would mean is take$11 million off the table.$3 million, you can keep that in SpaceX stock, you can use another tax strategy, you can do something else that's maybe less liquid, but you're still locking in what you need to do. Now you can see that that leads to less money overall. You can see, though, that there's still a very high probability of success of that happening. So Andrew, in this case, or you in this case, and by the way, if you want access to the same exact software, you can get access in the Retirement Planning Academy. Link is in the show notes below. More importantly, if you're looking for a guide to help you walk you through these decisions from an investment standpoint, a retirement standpoint, a tax standpoint, insurance, estate, everything you need to do to lock in early retirement, reach out to us here at Root Financial. You can scan this QR code right here. You can click the link in the show notes below. This is exactly what we help people do to retire early, but still pursue a job they care about or life that they are passionate about. But going back here, I could tell Andrew, you can take$3 million off the table, prioritize tax, prioritize investment, prioritize keeping that money tied up in SpaceX stock. It does not matter because if that money went poof and evaporated, your plan still works. And what we can start to do is we can start to solve for what's the threshold for how much we don't need to diversify. So in this case, up to$5 million. Once again, even if that completely disappeared, which the odds of that are highly, highly, highly unlikely, but we need to plan for it, just to say how much do you need to diversify? Still in a good spot. Now you can see if he takes this number too high, let's call it 8 million, which means 6 million is taken off the table, you pay taxes, and then try to lock in the life that you want. That's probably not going to happen. It's not enough money to take off the table to lock in early retirement, which is why this number or this exercise is so helpful. I can come back here and I can tell you, or in this case, I can tell Andrew, take money off the table. Lock in early retirement. This is not a prediction of where SpaceX is going. Even if SpaceX stock doubles, triples, quadruples 10x's over the next 10 years, what benefit is that to you? You already have the ability to lock in the life that you want. Why don't we do that now? And then still keep something in SpaceX stock to potentially get those returns. But if those returns don't materialize in the way we want them to, it does not matter because we've locked in what we want. And don't look at your money, don't look at your stock as the thing that you're pursuing. That's not the sign of a good financial plan. The sign of a good financial plan is that you've taken your assets and resources and used it to create the life you want to create. So this is the critical reframe. As your SpaceX stock is potentially becoming liquid here in 2026, you don't need to sell everything. That's not the point. You need to sell, you need to diversify enough to accomplish what you want to accomplish. And then with the remaining amount, you have the freedom to do what you want with that because that amount is above and beyond what you need to accomplish your baseline goals. So that's the main point that I would make to you. If you are a SpaceX employee, get the strategy right. Design the strategy with your stock that will support the life you want to live, but there's still the tactical, there's still the investment strategy, the tax strategy, the other stuff you need to understand to minimize taxes, to maximize gain potential long term. So what are some of those things? Well, number one, if you're going to start to diversify some of your SpaceX stock, don't just put it into a mutual fund or an ETF always. If you have a large enough balance and if your tax situation warrants, consider using something called a direct index or a separately managed account. What you're doing here is instead of just owning one or two or ten mutual funds or ETFs, you might be owning thousands of different stocks that are the actual underlying holdings of those ETFs. Why? This isn't just to add complexity for complexity's sake. This is so that you can take advantage of tax loss harvesting at a much higher level. If you only own, to use an extreme example, one ETF, well, depending on how that ETF is doing, you may or may not have the potential to tax loss harvest. If you take a look at any year in the stock market, even if it's a year where the stock market's up really big, say 20%, 30%, there's still a good number of the underlying securities within that stock market, within that index that have actually gone down in value. So what do you do? Well, you tax loss harvest those. You sell those specific investments, you lock in the losses, you then get back into the investment after the requiring holding period to not violate any wash sale rules. But by doing so, you're harvesting these losses, which can then be used to offset capital gains. Capital gains being things like sales from your SpaceX stock, assuming the sale isn't treated as ordinary income, but it's a long-term capital gain. So if you have millions and millions of dollars of long-term capital gains because you're selling your stock down the road, well, that's a huge tax bill. What if you could offset some of that through this tax loss harvesting? Now, what if you took it one step further? You didn't just implement a separately managed account, an SMA, you implemented a long short SMA. A long short SMA applies leverage to this, and that leverage magnifies the number of losses that you can realize while still giving you the potential to capture the upside gains. What is this good for? Well, this is perfect for people who are doing things like selling a business, selling a large amount of stock, selling some significant asset that's generating an enormous capital gain. Well, if you can then generate substantial long-term losses, those losses can be used to offset those gains. But make sure you hear me correctly. These aren't just losses of saying I'm putting money in just for the purpose of losing it. You're putting money in, knowing that some of these underlying securities will go down in value. That's how capital markets work. By selling those and repurchasing at a later date, you are, for the most part, maintaining exposure long term while harvesting losses that can offset some of the tax impact of significant sales from stocks, from businesses, whatever the case might be. So that's one big strategy. Another couple things to consider gifting. If you are doing any charitable giving, do not gift cash until you at least consider could you do the same thing with stock? Could you gift your stock? Because if you have stock that you acquired for, to use an extreme example,$1, and that is now worth$20,000, that$20,000 isn't as valuable to you as it is to the charity. The charity gets the full$20,000 that they sell. They're not subject to taxes. You, on the other hand, are. So your$20,000 investment might only be worth$13,000,$14,000 to you. That's where the SpaceX stock comes into play. Can you gift that instead of gifting cash? Take it one step further. Can you gift to a donor-advised fund? So if you're going to retire early, let's say at$40,000, but you got a lot of money in SpaceX stock and charitable giving something that you're going to do over the course of your lifetime. Well, what if you set aside enough money to cover your next 30 plus years of giving? What if you gifted$500,000 to this donor-advised fund? What you get is you get the entire deduction in the year that you make that gift. Now there are certain limits to that, and there are certain things that you need to make sure you're walking through with a financial advisor or a CPA, but you get a massive deduction that single year, then that$500,000, I'm just making up a number, but that$500,000 becomes the basis for all of your future gifts. So you get a massive tax deduction up front that you can then use to gift for the next 20, 30, 40 years, indefinitely even as that money continues to grow, and you can decide when that money is gifted out. And then a big one to consider too is option strategies. Now, these aren't tax strategies or investment strategies so much as they are protection strategies. Let's say you do have 10 million, 20 million, 30 million in SpaceX stock, and you know that you want to sell something, you want to start to lock in early retirement, you want to lock in flexibility and optionality, but you don't want to do it all at once. You don't want to have a seven-figure tax bill because if you sold all of your stock today, that might be exactly what you're looking at. What an option strategy does, if you can have a hedge on your portfolio, utilizing options, utilizing calls and puts, what you can do is you are giving up some of the upside potential of your stock appreciation. But by doing so and by acquiring put options, you are hedging against the downside. So by doing that, you're in some ways narrowing the range of expected outcomes. Instead of understanding that your stock could be way up or could be way down, the option strategy is narrowing that. And you're saying, I'm glad they trade off some of the upside in exchange to protect against the downside. What that's enabling is you to spread out your tax strategy over a few years, over a longer period of time, instead of needing to do everything all at once. So these are the tactical things to keep in mind. But at the strategic level, understand that the biggest risk that you face with your SpaceX stock isn't selling too early. It's staying trapped because all of your wealth stays in one place with one company, with one future. And regardless of how well it turns out, you are not able to live the life you want to live fully until you divest, whether it's today, whether it's in the future. So understand what that amount needs to be. Because when you do this well, you'll understand that freedom, true freedom, feels far better than just paper wealth. So if this is you, if you're that SpaceX employee, if you need help navigating this, that you can take what you've worked for, take what you've grinded for, and turn it into peace of mind and turn it into freedom, reach out to us here at Root Financial. Here again is a QR code that you can scan to set up a call. You can click on a link to our website in the show notes below, but there's too much at stake for you not to have a strategy going into 2026, going in to an IPO to make sure that this stock that you've worked for can now fully work for you and help you create the future you envision.
