​I’m 55 with $2.5 million in Apple stock that I bought 30 years ago and now it’s all capital gains – can I use these funds for the first 5 years of my retirement? 

Personal FinanceCanva | brusinski from Getty Images SignatureKristin HitchcockThis post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive
compensation for actions taken through them.24/7 Wall St. Key Points:For those investing outside of tax-advantaged accounts for retirement, considering how to handle taxes on capital gains is an important step of planning. 
There are several strategies that can help lower tax bills on capital gains. 
Retiring early is possible, and may be easier than you think. Click here now to see if you’re ahead, or behind. (Sponsor)
Capital gains taxes can be a huge obstacle for retirees. In a recent Reddit post, I read about a 55-year-old preparing for retirement in the next five years. However, he was facing a problem that isn’t all that rare:He has accumulated $2.5M in Apple stock that was purchased three decades ago. Now, it is almost all capital gains. He wants to draw on this income to fund his first few years of retirement, but doing so would count as Modified Adjusted Gross Income (MAGI).This would likely trigger higher taxes. So, how does he get around it? Let’s look at his situation and see what others can learn from it. Filing Status
Long-Term Capital Gains Tax Rate
Taxable Income in 2025
Single
0%
$0 – $48,350
Single
15%
$48,351 – $533,400
Single
20%
$533,401 or more
Married Filing Jointly
0%
$0 – $96,700
Married Filing Jointly
15%
$96,701 – $600,050
Married Filing Jointly
20%
$600,051 or more
Capital Gain’s Impact on MAGIThis poster’s main issue is that he plans on selling a large portion of this appreciated stock, which would increase his MAGI. This would result in higher taxes and likely push him into a higher Medicare bracket. Neither of those factors is a thing to scoff at. What Can He Do?There are some things he can do to help lower his bill. It’s important to note that this tax bill cannot be avoided completely. He will need to pay something on these capital gains. However, there are a few ways he can lower or spread out his tax burden:Spread out gains: By avoiding selling all the stock at once, he could spread out his tax burden and stay under IRMAA thresholds. 
Leverage charitable giving: Another option is to give to a donor-advised fund, which would lower his overall tax bill. 
Use tax-advantaged accounts: He could consider a blend of early IRA withdrawals or Roth conversions to reduce taxes in the future, potentially offsetting taxes from his Apple stocks. 
Explore specialized investments: He could also use a Qualified Opportunity Fund to reinvest his Apply stock into a different investment opportunity, potentially delaying his tax burden. For instance, many invest their money in real estate. 
Plan ahead for RMDs: While it is still some years out, he should go ahead and start planning for RMDs, which will help him minimize future faces. 
These five strategies could all lower his tax bill and Medicare costs. Which o