Retire Early With RSUs
A Tax-Smart Exit Plan

Can you retire early with RSUs?

Yes, but RSUs are taxed as wages when they vest, so the early-retirement planning is about what you do with the vested shares afterward. Selling appreciated shares after you stop working can cut the federal tax on the gain sharply, because there are no wages stacked under it. The risk is holding one stock until then.

A workable plan usually combines four pieces: diversify enough before leaving to survive a large fall in your employer's stock, sell the rest across low-income years using the 0% and 15% long-term gains brackets, bridge to retirement accounts with the Rule of 55 or 72(t) payments, and price health insurance until Medicare at 65.

How are RSUs taxed if you retire early?

RSUs are taxed as ordinary income on the value of the shares when they vest, whether or not you sell. That part of the tax is paid while you work and cannot be moved into retirement. What you can move is the tax on growth after vesting: if you hold vested shares and sell them later, the increase is a capital gain, long-term after a year. See how RSUs are taxed.

Unvested RSUs usually forfeit when you leave, so the last vest dates often set the retirement date.

Is it cheaper to sell RSU shares after you retire?

For federal tax, usually yes. Long-term gains stack on top of other taxable income. With $400,000 of wages, every dollar of gain is taxed at 15% or 20% plus the 3.8% net investment income tax. With no wages, the first $98,900 of taxable income is taxed at 0%.

The trade-off is risk: waiting to sell until after you retire means holding a concentrated position longer. State tax, which can add up to 13.3% in California, is not included.

How do you access money before 59½?

What about health insurance and IRMAA?

Before 65 you need marketplace, COBRA or private cover, and premium subsidies depend on income. From 63 onward, income also sets your future IRMAA bracket. The years when a sale is cheapest for income tax can be the years that raise Medicare premiums later, so plan both together.

How much RSU stock is too much to retire on?

Many planners flag any single stock above 10–20% of net worth. A tech employee with years of vests can easily hold 50% or more in one company. A 50% fall in that stock just before retirement can delay it by years. See diversifying concentrated RSU stock.

Is there a way to get income from RSU shares without selling?

Once RSU shares have vested and appreciated, Embark accepts them in kind into a §721 SPV with $0 tax at contribution and targets 10%+ annual income from the position. That income can help bridge the years before retirement accounts and Medicare. It is a target, not a guarantee; shares have a 3-year lock-up and Embark is for accredited investors.

Frequently asked questions

Are RSUs taxed again when you sell?
Only the change in value after vesting is taxed when you sell, as a capital gain or loss.

What happens to unvested RSUs when you retire?
They usually forfeit, unless your plan has a retirement or acceleration provision.

What is the 0% capital gains bracket in 2026?
Up to $98,900 of taxable income for joint filers and $49,450 for single filers.

Does the Rule of 55 apply to IRAs?
No. It applies only to the plan of the employer you left in or after the year you turned 55.

Should I sell RSUs before or after retiring?
After usually lowers the federal tax on the gain; before reduces concentration risk. Most plans do some of each.

How do RSU sales affect Medicare premiums?
Gains from age 63 onward count toward IRMAA, which raises Part B and D premiums two years later.

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