One Stock Will Be 71% of a 63-Year-Old Indianapolis Couple’s $2.4 Million. Selling It Will Cost $290,000. Holding It Could Cost the Retirement

A 63-year-old couple in Indianapolis has built $2.4 million, and roughly 71% of it is headed into a single stock. Usually that means employer shares piled up through years of grants, discounted purchase plans, and never getting around to selling. Cashing out would trigger an estimated $290,000 tax bill. Holding ties their retirement to one company’s next few years.

This is one of the most common positions longtime employees of successful companies end up in, since the stock did the heavy lifting and selling feels both disloyal and expensive.

Timing makes it urgent. On the Clark Howard Podcast in May 2026, a listener named Justin in Illinois asked Wes Moss how early retirees manage sequence-of-returns risk while living off a taxable brokerage account. This couple faces a sharper version of that question, because their first retirement years depend on one stock holding up.

Why the Tax Bill Is the Wrong Number to Anchor On

The $290,000 feels painful because it is a check written to the IRS, while concentration risk stays invisible until it arrives. A routine correction in one stock can erase more than the entire tax bill in a single quarter, and individual companies suffer deep drawdowns far more often than diversified indexes do.

At 63, this couple needs the portfolio to fund withdrawals for 25 to 30 years. A steep drop right before or just after retirement forces them to sell depressed shares to cover living costs, locking in losses that never recover. That is sequence risk at its most dangerous.

Most of This Tax Bill Arrives Eventually Anyway

Waiting usually just moves the tax to a later year. Every future sale triggers the same gains unless the couple donates shares or holds until death for a step-up in basis. Their estate sits far below the 2026 federal exemption of $15 million, so estate tax plays no role, and holding a 71% position for two decades to chase a step-up is the riskiest plan available.

Timing can trim the bill. For joint filers, long-term gains are taxed at 15% until taxable income passes roughly $613,700, then 20%. The 3.8% net investment income tax applies above $250,000 of modified AGI, a threshold Congress never indexed for inflation. Indiana adds its flat state tax plus Marion County’s local levy, and spreading sales across several tax years keeps more gain in the lower federal tier, though the surtax and state tax still apply.

Medicare surcharges (IRMAA) look back two years, so gains realized at 63 can raise premiums at 65. That cost is temporary and small. It pales next to the concentration risk (IRMAA is one of nine IRS rules that slowly drain retirement accounts, and we laid out all of them in a free tax trap guide).

Two Realistic Paths, and One Clearly Wins

Path 1: Sell everything this year, which leaves you clean, simple, and fully diversified by January. The cost is paying the top rate on much of the gain plus a likely IRMAA hit. For couples in a volatile sector, or retiring within a year, this is defensible.

Path 2: A front-loaded staged sale. Sell a large portion now, enough to cut the position to roughly a third of the portfolio, then finish over the next two to three tax years. Ideal sale years are the low-income stretch after paychecks stop and before Social Security begins. Couples who give to charity can donate appreciated shares to a donor-advised fund, eliminating capital-gains tax on those shares.

For most couples in this spot, Path 2 offers the better balance. It gets most of the available tax savings while reducing risk immediately. The worse path is the popular one: holding everything while waiting for a better price or a cheaper tax year. That turns a tax problem into a retirement problem.

Where the Proceeds Can Earn More Right Now

Current rates make diversifying easier. The 10-year Treasury yields about 5.2%, its highest reading of the past year and up from 4% in February. Treasury interest is also exempt from Indiana income tax. Compare that with the national average 12-month CD at 1.7%. Parking two to three years of spending in Treasuries builds a buffer, so neither the remaining stock nor the new diversified holdings ever has to be sold in a downturn.

What to Decide Before December 31

First, pull the cost basis for every lot. High-basis lots can be sold first for very little tax, and many couples discover the first portion costs far less than the headline $290,000 implies.

Second, write down a sale schedule with dates and share counts, and many couples find it helps to stick with it regardless of price. The most expensive mistake here is letting the stock’s next rally talk you out of the plan. Using a CPA paid only by fee makes sense in this case, because managing lot selection, bracket management, and IRMAA timing across three tax years can lower the total tax cost.

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