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    n1999's Avatar
    n1999 Posts: 2, Reputation: 1
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    #1

    Feb 16, 2006, 11:36 AM
    401K and which state tax ?
    I understand that I have to pay fed and state tax when I take out 401K at 59 1/2 yrs old.
    Currently I have lived in California for 30 yrs and have 401K. Next year I plan to retire and considering moving to Texas or Arizona where the cost of living is lower than California.
    Question: which state do I have to pay tax when taking out 401K since all my 401K was from California ?
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
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    #2

    Feb 16, 2006, 12:28 PM
    You will be paying the tax depending on the state you are living in when you withdraw the money. Also you would not be taking all of the money out? Just starting to draw off it for needed expenses? Or are you planing to take it all out.

    Also if you are taking it all out, consider moving to a state that has no state income tax, will save you a chunk. And Tennessee is wonderful, great seasons, mountains and most of us have all our teeth.
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