Case Study: How a Merck Director in Upper Gwynedd Reduced Her Tax Bill by $28,000 — While Eliminating a Major Concentration Risk

Client Profile	Associate Director, Regulatory Affairs | Merck Upper Gwynedd | 17 years tenure | Age 51 | Married, two children in college
Income	$195,000 base + $35,000 annual bonus + RSUs vesting $40,000/year
Challenge	38% of net worth concentrated in Merck stock. No tax strategy for RSU vesting. Underfunding 401(k). No estate plan updated since 2014.
Result	$28,000 reduction in annual tax liability. Merck stock reduced to 11% of portfolio. 401(k) maxed. Estate documents updated.

The Situation

"Sarah" came to Blue Bell Wealth Management after attending a financial planning seminar we hosted in Blue Bell in early 2025. She had been at Merck for 17 years, rising to Associate Director of Regulatory Affairs at the Upper Gwynedd campus. By most measures, her career had been a success.

But her finances told a messier story. Despite earning approximately $270,000 in combined salary, bonus, and RSU income in 2024, she and her husband had never worked with a financial advisor. Their investments were split across four different brokerage accounts, three of which held significant Merck stock accumulated over years of RSU vesting. Nobody had ever added it up.

What We Found

In our first meeting, we conducted a complete financial inventory. The findings were sobering, not because the situation was dire, but because the opportunity cost of inaction was becoming significant:

•      $480,000 in Merck stock across three accounts — representing 38% of the household's investable assets

•      RSUs vesting at approximately $40,000/year, with no tax strategy — Merck's 22% withholding left Sarah consistently short at tax time

•      401(k) contributions of only $15,000/year — well below the $23,500 limit, and not capturing the full Merck match

•      Estate documents (will, beneficiary designations, healthcare proxy) last updated in 2014 — before the birth of their second child and a significant home purchase

•      No coordinated plan between the pension, 401(k), and RSU assets

 

The Plan We Built Together

Step 1: Systematic RSU Diversification

We designed a structured diversification schedule: Sarah would sell 25% of her vested Merck shares in Q1 of each year, using the proceeds to fund a globally diversified portfolio. Rather than trying to time the stock, the schedule removed emotion from the decision.

We also timed one sale in December, shortly before year-end, to pair the gain with a tax-loss harvesting action in her existing portfolio, reducing the net capital gain significantly.

Step 2: Donor-Advised Fund for Appreciated Shares

Sarah and her husband had been donating approximately $8,000/year to their church and two local nonprofits in cash. We shifted that strategy: instead of cash, they donated $18,000 of their most appreciated Merck shares directly to a Donor-Advised Fund.

The result: they eliminated capital gains tax on those shares entirely, received a $18,000 charitable deduction (vs. the $8,000 they'd previously been claiming), and distributed grants to the same organizations from the DAF. Their out-of-pocket cost was the same, but the tax outcome was dramatically better.

Step 3: Maximize the 401(k)

We walked Sarah through adjusting her 401(k) contribution to the 2025 maximum. The additional $8,500 in pre-tax contributions generated approximately $3,200 in immediate federal and state tax savings,  money that had previously been going to the IRS instead of her retirement.

Step 4: Estate Plan Update

We assisted Sarah and her husband with drafting estate documents. Within 60 days, they had updated wills, a new healthcare directive, revised beneficiary designations on the 401(k) and life insurance policies, and a revocable trust to simplify the eventual transfer of assets.

 

The Outcome

Combined impact in Year 1: $28,000 reduction in tax liability (capital gains elimination + increased charitable deduction + 401(k) tax savings). Merck concentration dropped from 38% to 11% of investable assets. Estate documents fully current. Total time from first meeting to implementation: 11 weeks.

Sarah's comment at our six-month review: "I knew I was leaving money on the table, I just didn't know how much. Seeing it all laid out in one place was clarifying in a way I didn't expect."

Is Your Situation Similar?

If you're a Director or Associate Director at Merck's West Point or Upper Gwynedd campus with RSUs vesting and no coordinated plan for your stock, your 401(k), and your pension, this is exactly the kind of work we do.

At Blue Bell Wealth Management, we serve Merck employees and other executives throughout Montgomery County. Our work is fee-only and fiduciary,  we're compensated by you, not by the products we recommend.