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Dell Technologies Employees: Smarter Ways to Manage Taxes on Appreciated Stock

Healthcare Provider Update: Healthcare Provider for Dell Technologies Dell Technologies provides its employees with healthcare coverage through a variety of plans. The primary healthcare provider associated with Dell is UnitedHealthcare, which offers comprehensive health insurance options to Dell employees, focusing on coverage that fits a range of healthcare needs. Healthcare Cost Increases in 2026 As Dell Technologies employees prepare for 2026, they should anticipate significant increases in healthcare costs driven by rising ACA marketplace premiums. Many states are projecting steep hikes, with some rates soaring over 60%. Key factors behind this surge include the potential expiration of enhanced federal subsidies, escalating medical inflation, and considerable rate increases from major insurers. For Dell employees, these challenges may lead to a greater share of healthcare expenses, warranting a proactive approach in reviewing benefits and planning for the financial implications of these changes. Click here to learn more

'Dell Technologies 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.

'Dell Technologies 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.' Dell Technologies 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. Dell Technologies 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 Dell Technologies 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 Dell Technologies 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 Dell Technologies 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 Dell Technologies 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 Dell Technologies 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 Dell Technologies 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 is the Dell Technologies 401(k) Savings Plan?

The Dell Technologies 401(k) Savings Plan is a retirement savings plan that allows employees to save for their future by contributing a portion of their salary on a pre-tax or after-tax basis.

How can I enroll in the Dell Technologies 401(k) Savings Plan?

Employees can enroll in the Dell Technologies 401(k) Savings Plan through the employee benefits portal or by contacting the HR department for assistance.

What types of contributions can I make to the Dell Technologies 401(k) Savings Plan?

Employees can make pre-tax contributions, Roth (after-tax) contributions, and, in some cases, catch-up contributions if they are age 50 or older.

Does Dell Technologies offer a company match for the 401(k) Savings Plan?

Yes, Dell Technologies provides a company match on employee contributions to the 401(k) Savings Plan, which helps employees save more for retirement.

What is the vesting schedule for the Dell Technologies company match in the 401(k) Savings Plan?

The vesting schedule for the company match in the Dell Technologies 401(k) Savings Plan typically follows a graded vesting schedule over a period of years.

Can I take a loan from my Dell Technologies 401(k) Savings Plan?

Yes, Dell Technologies allows employees to take loans from their 401(k) Savings Plan, subject to certain terms and conditions.

What investment options are available in the Dell Technologies 401(k) Savings Plan?

The Dell Technologies 401(k) Savings Plan offers a variety of investment options, including mutual funds, target-date funds, and company stock.

How often can I change my contribution amount to the Dell Technologies 401(k) Savings Plan?

Employees can change their contribution amount to the Dell Technologies 401(k) Savings Plan at any time, typically through the employee benefits portal.

What happens to my Dell Technologies 401(k) Savings Plan if I leave the company?

If you leave Dell Technologies, you have several options for your 401(k) Savings Plan, including rolling it over to an IRA or a new employer’s plan, or cashing it out (though this may have tax implications).

Is there a minimum contribution requirement for the Dell Technologies 401(k) Savings Plan?

Yes, Dell Technologies may have a minimum contribution requirement for participation in the 401(k) Savings Plan, which is typically outlined in the plan documents.

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

Dell Technologies provides a 401(k) plan with a generous company match. Employees have access to a range of investment options and financial planning resources.

Dell Technologies grants RSUs to its executives and key employees. RSUs vest over a period of three to four years, aligning employee interests with company success.

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For more information you can reach the plan administrator for Dell Technologies at One Dell Way Round Rock, TX 78682; or by calling them at (512) 338-4400.