P&G Has Cut 5,000 Jobs So Far. At 60, a Worker Leaving With Company Stock Can Lose a Capital-Gains Tax Break by Rolling Everything Into an IRA.

Procter & Gamble (NYSE: PG | PG Price Prediction) entered fiscal 2027 with about 104,000 employees, reportedly down roughly 5,000 from a year earlier as its restructuring moves toward a planned reduction of as many as 7,000 nonmanufacturing roles.

Picture a hypothetical 60-year-old Cincinnati employee caught in that transition. She has severance coming and a 401(k) holding a large block of P&G shares accumulated over years. The rollover paperwork makes the next move look obvious: send the entire account to an IRA. That can be the expensive box to check. Employer stock inside a 401(k) can qualify for a special tax treatment called Net Unrealized Appreciation, or NUA. Roll those shares into an IRA first, and that opportunity generally disappears.

The Rollover Can Close the NUA Door

NUA separates the stock’s original cost from the appreciation that built up inside the retirement plan. Suppose her P&G shares are worth $400,000 with an $80,000 cost basis. If she takes the shares in kind as part of a qualifying distribution, the $80,000 basis is generally taxed as ordinary income in the year of distribution. The $320,000 of NUA is deferred until she sells the shares and is then treated as long-term capital gain.

Roll the stock into an IRA instead and future taxable withdrawals generally come out as ordinary income. That can create a meaningful rate difference. At a 24% ordinary-income rate versus a 15% long-term capital-gains rate, the difference on $320,000 is about $28,800. That is not guaranteed tax savings: timing, other income, state taxes and the value of continued IRA tax deferral all affect the result.

There is another important requirement. NUA generally involves a qualifying lump-sum distribution of the participant’s entire balance from the employer’s plans of the same type within one tax year. The employer shares can move in kind to a taxable brokerage account while other eligible assets are rolled to an IRA. At 60, she is also past 59½, so the usual 10% early-distribution penalty is no longer the issue.

Social Security Bridge

She cannot claim Social Security until 62, which gives the P&G shares another potential job: financing the first years after work while she delays the benefit. For someone born in 1966, full retirement age (FRA) is 67. Claiming at 62 generally reduces the retirement benefit by 30%. A $2,500 benefit at 67 becomes about $1,750 at 62. Waiting to 70 would raise the full-retirement-age amount by another 24%, to roughly $3,100 before future cost-of-living adjustments.

Selling appreciated employer stock from a taxable account does not count as wages for Social Security’s retirement earnings test. So once she reaches 62, capital gains from staged stock sales can help fund retirement without triggering benefit withholding the way wages or net self-employment income can. The tax return sees those gains differently.

Capital Gains and Taxes

Capital gains feed adjusted gross income (AGI), which means selling a large NUA position after Social Security begins can increase the amount of the benefit subject to federal income tax. For a single filer, combined income above $25,000 can make up to 50% of benefits taxable, while more than $34,000 can expose up to 85%. For married couples filing jointly, the thresholds are $32,000 and $44,000.

That makes the years between leaving P&G and starting Social Security potentially valuable for sequencing stock sales. In 2026, the 0% long-term capital-gains bracket extends to $49,450 of taxable income for single filers and $98,900 for married couples filing jointly.

How much NUA can actually fit there depends on everything else on the return. If she also has traditional IRA money, required minimum distributions generally will not begin until 75. That leaves years for partial Roth conversions or strategic withdrawals, which is the whole subject of a free guide we put together on the Roth window.

Look Before You Leap

Before moving the old 401(k), a few details deserve a closer look:

1. Get the cost basis and NUA amount on the P&G shares. A large gap between basis and market value can make the special treatment worth modeling before any rollover occurs.
2. Compare the full sequence, not just this year’s tax bill. Model the NUA distribution, stock-sale timing, IRA rollover and Social Security claiming date together before choosing the path.

Leaving P&G may close one chapter of the retirement plan. Taking a closer look at the company stock before rolling it over can keep one valuable option open.

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