Mark Cuban Wants Workers to Own Company Stock. Social Security Counts the Shares That Vest but Ignores the Ones They Sell.

Billionaire entrepreneur Mark Cuban has long advocated for workers owning a stake in the companies they work for, and the idea is gaining traction beyond one sector. Retail, healthcare, logistics, and manufacturing employers now hand out equity as part of compensation. That is a good thing. It also creates a small trap for anyone claiming Social Security before full retirement age (FRA).

Picture a warehouse operations lead in his early sixties. He has been at the same employer for years, is already collecting Social Security, and is still working. In one month, two things happen. A block of restricted stock units (RSUs) vests on a schedule set years ago, and he decides to sell older shares he has held for a long time. Same company. Same stock symbol. Two completely different answers from Social Security. Stock options and employee stock purchase plans have their own quirks.

Vesting Counts as Wages. Selling Older Shares Usually Does Not.

When RSUs vest, their value generally counts as compensation. It runs through payroll, shows up on the W-2 and is generally subject to Social Security and Medicare taxes. For someone collecting Social Security before FRA, that means the income can count against the retirement earnings test.

In 2026, someone under FRA for the entire year can earn $24,480 before the test begins reducing benefits. Above that amount, Social Security withholds $1 in benefits for every $2 in excess earnings. Once the worker reaches FRA, the earnings test disappears, and Social Security later recalculates the benefit to give credit for months in which checks were withheld. In the short run, though, a large vesting event that was set years earlier can suddenly put several months of Social Security checks at risk.

Selling shares he already owns is different. If the shares vested in prior years and he has been holding them, any gain when he sells is generally investment income, not wages. Social Security does not count investment income against the retirement earnings test. He could sell a meaningful position without that capital gain reducing his monthly benefit under the test.

One Date He Controls, One He Usually Does Not

The vesting schedule is typically established when the grant is made, so the worker usually cannot simply move a vesting date because it collides with Social Security. He does control when he sells older shares. But that is not an earnings-test planning tool. Moving the sale to another year will not make room under the earnings limit because the capital gain was not counted there in the first place.

The useful planning happens earlier. Someone claiming Social Security before FRA should pull up the vesting schedule before filing and see how much equity compensation is expected to hit payroll. A large vest could change how many Social Security checks actually arrive that year, which makes the claiming-age decision worth its own look (we boiled the 62 versus 67 versus 70 question down to a one-page framework in a free guide here).

The Sale Still Has a Tax Tail

A capital gain may escape the earnings test, but it does not disappear from the tax return. Investment income can increase the amount of Social Security benefits subject to federal income tax. The Internal Revenue Service (IRS) looks at half of Social Security benefits plus other income, including investment income, when determining whether benefits become taxable.

A large gain can also matter for Medicare. Income-related surcharges for Part B and Part D generally use tax information from two years earlier, so a large stock sale this year could show up in higher Medicare premiums two years later. The standard 2026 Part B premium is $202.90, and surcharges begin once modified adjusted gross income (MAGI) rises above $109,000 for a single filer or $218,000 for a married couple filing jointly.

For a worker selling a modest block of shares, that may never become an issue. For someone sitting on years of accumulated company stock, it deserves a look before the sell order goes through.

The Same Stock, Two Different Buckets

Employee equity can be a valuable piece of compensation. The distinction for workers collecting Social Security early is that the government cares how those shares reached the brokerage account. A new block that vests can look like a paycheck. An older block sold for a gain looks like an investment. By the time both are sitting in the same brokerage account, the shares may look identical. Social Security remembers which ones arrived as pay.

Contact [email protected] for any questions or corrections.