Ask Terry Questions 401 k withdrawal

401 k withdrawal

By Terry Savage on November 28, 2023 | Financial Planning / Retirement

Hi Terry, I will be 66 in Jan. 23 and have recently retired. I will be taking money from my 401 k monthly until my full retirement age then I will take SS. My 401 k has some money in a Roth, will I take it from there?
Also do I determine how much I will need and just have it distributed monthly as a direct deposit?
Thank you,

Terry Says

Are you still working for the company? If not, you might want to roll the portions of your 40l(k) plan SEPARATELY into traditional and ROTH IRA rollovers.
Read this:

But if you are still working for the company, and still contributing, the company will have a monthly distribution from either account sent directly to your bank account.
The money taken out of the Roth is tax free. So depending on your tax bracket, you might want to withdraw from that account first, so the withdrawal plus ongoing income doesn’t put you in a higher tax bracket.
You really should consult with a CPA to figure out how much additional income you can handle at your CURRENT tax bracket.
Later on, when you don’t have income from work, your taxable withdrawals from the traditional plan will have less impact on taxes, since you’ll likely be in the lowest bracket.



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