I did implement employee stock options for you a while back. It’s not a commonly used feature and was a little tricky, so I’m wondering how’s that's working out?
I did implement employee stock options for you a while back. It’s not a commonly used feature and was a little tricky, so I’m wondering how’s that's working out?
The withdrawal does not trigger the exercise in the TM, it’s in the function to grow the investments that does it. It checks for hitting that strike date. The options are always exercised on the strike date and trigger the taxes, (if in the money, otherwise they are lost but I suppose that would only happen in a simulation run). The way it’s done is you get shares, not cash, and these can then be sold to accommodate automatic withdrawals from the account (or priorities if you need the money). After exercise and not withdrawn, the shares just behave as any regular investment.
In an optimized scenario, the TIME MACHINE ignores your set automatic withdrawals and priorities after retirement to instead do withdrawals according to what was suggested by the optimizer algorithm. If that algorithm determined you should keep those shares, then they won’t be sold (but they will be exercised and trigger taxes).
However think of it this way: in real life you would get the cash and have to move it, but the TIME MACHINE/Optimizer is telling you don’t need it for consumption so you can reinvest it in a different account/investment. Just think of the option account after exercise as that new non-registered account holding a similar investment in terms of growth rates as the original underlying stock (it will even start paying dividends at that point if the stock was set to pay dividends). Does that make sense?
Glad you’re having fun! Thanks for the feedback,
Thanks!
How you have set it up makes sense.
So, the options are exercised and would be included in the "external" income, with associated taxes calculated accordingly?
That would explain the bump in external income over those 3 years.
Very cool, thanks again.
The TM does record the shares value as a deposit to the account on the strike date, it also will increase taxes. This is how external income is calculated:
External income = Net income + Taxes
Net income = Spending + Savings
Savings = sum of all net deposits to all accounts
Savings is increased by the deposit, but decreased by the increased taxes that are paid out from accounts. So the boost in External income you are seeing is the net effect of the share value - taxes. So I agree, very cool!