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American International Group Employees: Smarter Ways to Manage Taxes on Appreciated Stock

Healthcare Provider Update: Healthcare Provider for American International Group American International Group (AIG) does not operate its own health insurance plans but partners with various insurance providers to offer services. Key partners include major healthcare insurers such as UnitedHealthcare, Anthem, and Cigna, among others. These collaborations allow AIG to provide diverse health insurance options to its clients in a variety of markets. Potential Healthcare Cost Increases in 2026 As AIG navigates the changing healthcare landscape, a significant rise in health insurance premiums is anticipated for 2026, particularly within the Affordable Care Act (ACA) marketplace. Reports indicate that some states may experience premium hikes exceeding 60%, driven by factors such as increasing medical costs, the expiration of federal premium subsidies, and aggressive rate increases by major insurers. Without congressional action to extend enhanced subsidies, an estimated 22 million enrollees could face out-of-pocket premium increases of over 75%, potentially pricing many middle-income Americans out of affordable coverage. This convergence of market forces poses substantial challenges for both insurers and consumers alike, reshaping the healthcare landscape in the coming years. Click here to learn more

'American International Group employees with concentrated stock positions may benefit from thoughtful tax planning that allows for tax deferral while balancing liquidity, compliance, and long-term compounding,' Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.

'American International Group employees who hold highly-appreciated stock may want to consider tax-efficient strategies that help mitigate their liabilities while aligning with their overall retirement goals,' Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

How taxes can affect investment returns, particularly on concentrated stock positions.
Exchange funds and options-based strategies as methods for tax deferral and diversification.
Alternative planning techniques outside ETFs, including charitable trusts and gifting strategies.

By Carlos Hernandez, Wealth Enhancement advisor

When it comes to driving portfolio returns, many investors aim to keep management fees low by investing in low-cost index funds and exchange-traded funds (ETFs). While fees matter, however, the real culprit for lower-than-anticipated performance is taxes. ¹

Wealth Enhancement advisor Carlos Hernandez explains: 'By losing less to taxes each year, investors have access to more capital that can continue to compound over time. This makes tax deferral an important part of an effective financial plan.' American International Group employees looking for long-term growth strategies could benefit by understanding how to better manage their investment tax burdens.

Trade Money

One area where taxes can take a toll is on the sale of company stock or other concentrated investment positions. American International Group professionals looking to diversify could face significant capital gains taxes on an outright sale. One way to diversify without triggering immediate capital gains is through exchange funds. By contributing their highy-appreciated stock to a pooled fund, investors can trade their concentrated holdings for shares in a diverse basket of securities. This method can be used by American International Group employees who want to diversify while postponing taxable events.

Although this method allows for tax deferral, it also requires investors to hold the exchange fund for a period of time, typically seven years. ² This could create a challenge for investors who require liquidity. Additionally, these funds are often exclusively accessible to wealthy, accredited investors—something American International Group executives should carefully evaluate.

Funds Based on Options

Another way to mitigate taxes on the sale of highly-appreciated stock is by using options contracts. The idea is to hedge risk with put options while covering the cost of those puts by selling call options—a strategy called 'collaring'. From there, the strategy reverses, with investors selling put options and using the proceeds to buy call option on an equity or bond index. ³ If managed effectively, this helps to diversify a concentrated portfolio while still maintaining liquidity.

Given the complexity of this strategy, meticulous planning is necessary. It's generally recommended that investors work with an experienced financial advisor before pursuing this approach.

Things to Be Aware of

Although these strategies can be beneficial for American International Group employees who hold highly-appreciated stock, caution is recommended. There are costs associated with these approaches, and potential liquidity risks. Additionally, the IRS may eventually contest such arrangements because their tax status has not been thoroughly examined—something American International Group retirees should keep top of mind.

'Tax drag reduction strategies can be effective, but they must be assessed through the lens of risk, liquidity, cost, and compliance,' warns Carlos Hernandez. What is appealing in theory must hold up to inspection in the real world.

Alternative Strategies

Although they show promise, investors with highly-appreciated stock or those looking to postpone gains have other alternatives besides exchange funds or options. Other tactics could include:

- Prepaid variable forwards (subject to IRS regulations, contracts to sell at predetermined terms in the future).
- Charitable remainder trusts (CRTs), which allow investors to donate appreciated stock to a charitable trust and receive a stream of regular income in return.
- Donor-advised funds (DAFs), which provide investors with a tax deduction for the fair market value of the appreciated stock they donate.
- Other gifting techniques, such as direct donations to charity or family.
Each has its own set of guidelines, advantages, and disadvantages. To limit unnecessary taxes or violating the constructive sale regulations, careful planning is necessary for American International Group professionals managing complex portfolios.

The Bottom Line

Although the movement to mitigate the tax burden on investments is not new, the instruments are changing. Both exchange funds and options-based structures offer investors a way to manage tax liabilities, especially for American International Group employees who hold highly-appreciated stock.

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In the end, taxes are unavoidable. However, with the correct set of instruments, they can be controlled and postponed. 'The real value comes from aligning tax strategy with investment strategy,' summarizes Carlos Hernandez.

Sources:

1. BlackRock Advisor Center. ' Investing for After-Tax Returns ,' 2025.

2. Kiplinger. ' Four Clever and Tax-Efficient Ways to Ditch Concentrated Stock Holdings ,' by Robert Waskiewicz. Sep. 11, 2025.

3. Financial Planning Association. ' Tax-Efficient Ways to Diversify Concentrated Stock Positions ,' by Peter Lazaroff. Oct. 2024.

What type of retirement savings plan does American International Group offer to its employees?

American International Group offers a 401(k) retirement savings plan to its employees.

How can employees of American International Group enroll in the 401(k) plan?

Employees of American International Group can enroll in the 401(k) plan through the companys benefits portal during the enrollment period or upon starting employment.

What is the employer match policy for the 401(k) plan at American International Group?

American International Group provides a matching contribution to the 401(k) plan, which typically matches a percentage of employee contributions up to a certain limit.

Are there any eligibility requirements for American International Groups 401(k) plan?

Yes, employees must meet certain eligibility requirements, such as a minimum length of service, to participate in American International Group's 401(k) plan.

What investment options are available in the American International Group 401(k) plan?

The American International Group 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and company stock.

Can employees of American International Group take loans against their 401(k) savings?

Yes, American International Group allows employees to take loans against their 401(k) savings, subject to specific terms and conditions.

What is the vesting schedule for employer contributions in the American International Group 401(k) plan?

The vesting schedule for employer contributions in the American International Group 401(k) plan typically follows a graded vesting schedule, which means employees earn ownership of the contributions over time.

How often can employees change their contribution amounts to the American International Group 401(k) plan?

Employees of American International Group can change their contribution amounts to the 401(k) plan at any time, subject to the plan's rules.

What happens to the 401(k) savings if an employee leaves American International Group?

If an employee leaves American International Group, they have several options for their 401(k) savings, including rolling it over to another qualified plan or withdrawing the funds.

Does American International Group provide resources for employees to learn about retirement planning?

Yes, American International Group offers educational resources and tools to help employees understand their 401(k) plan and make informed retirement planning decisions.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

American International Group (AIG) is a leading global insurance organization. The company provides a wide range of property casualty insurance, life insurance, retirement products, and other financial services.

AIG offers RSUs and stock options to eligible employees. The stock options vest over time, providing long-term incentives.

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For more information you can reach the plan administrator for American International Group at 175 Water Street New York, NY 10038; or by calling them at (212) 770-7000.