[compiler]

Assuming a person only has working salary as well as traditional 401k account while he is working. What benefits will he receive after his retirement and what benefits payments he received will be taxable? Thank you for your answer.

[ebaines]

Tax consequences for income and bennfits in retirement can nclude:

1. Social security - a portion may be taxable depending on your adjusted gross income.

2. Pension payments from a defined benefit retirement plan, if your former employer(s) have them. Taxed as ordinary income.

3. 401(k) and/or IRA distributions, which are treated as ordinary income for tax purposes, except that qualifying distributions from a Roth IRA or Roth 401(k) may be tax-free. There may also be a 10% early withdrawal penalty if you take a distribution and are not yet 59-1/2 years of age (or 55 in some cases for 401(k) withdrawals).

4. If you receive other benfits from your former employer when you are in retirement there may some tax consequences. Medical insurance coverage is generally not taxable, but the cost of group life insurance may be. If you tell us what type of benefits you are specifically interested in we can give a more precise answer.

Also - the states that have an income tax treat these payments differently. For example some states exempt a portion of retirement income from pensions, IRAs ad 401(k)'s, but others don't.