What do you pay in taxes when you start to withdraw funds from your 401k after 59 1/2 if you have no other income?
Also, how much are you required to withdraw from your 401k after 59 1/2?
What do you pay in taxes when you start to withdraw funds from your 401k after 59 1/2 if you have no other income?
Also, how much are you required to withdraw from your 401k after 59 1/2?
The amount of taxes will depend on your tax bracket and how much you take out. Whatever you withdraw is considered to be ordinary income (just like wages). So your tax rate will depend on your personal situation. You can look up the tax rates for various income brackets here:
2007 Federal Tax Rate Schedules
These federal tax brackets are for 2007, and will change a bit due to inflation for 2008, but not by too much. Also, don't forget that if you are subject to state or local income tax you will have to pay that as well.
You are not required to withdraw anything from your 401(k) until April 1 of the calendar year after you reach age 70-1/2. From that point on you are required to withdraw a certain amount each year, depending on life expectancy.
Can I withdraw money after 59 1/2 without retiring?
Depends on the rules for your company's plan. Some plans allow in-service withdrawals by employees age 59-1/2 or plder, but many do not. To learn the rules of your plan you can either ask someone in your company's benefits department or contact the plan administrator.
If you begin to withdraw from a 401k at age 60, say, is there some rule that requires you to continue to withdraw a certain amount from that fund thereafter? Seems I heard that somewhere. Is that just for 70 1/2 ?
No, there is no such rule for someone who is 60. Once you reach age 70-1/2 then there is a mandatory minimum distribution you must take each year - but prior to that there are no required distributions. For people under 70-1/2 if you decide to take a withdrawal there is no requirement to continue taking withdrawals in subsequent years.
Are 401K withdrawals after age 59 1/2 subject to STATE taxes?
Depends on the state. For most states, yes, 401(k) distribuitions are subject to state income taxes (as well as federal income taxes, of course). But some states exempt all or part of your 401(k) retirement account from state income tax. Tell us what state you live and/or work in and we can tell you the tax consequences.
I Live In Georgia , City of Powder Springs in Cobb County
I Live In Georgia , City of Powder Springs in Cobb County
For GA income tax if you are over 65 year of age up to $65K in retirement income is exempted ($35K if you are between ages 62-64).
All times are GMT -7. The time now is 08:44 AM. |