Ask Terry Questions Dividends in Stock Retirement Plan

Dividends in Stock Retirement Plan

By Terry Savage on August 07, 2017 | Investments

I have a stock retirement pension plan with my previous company and I was wondering if the dividends from the plan are taxed at the same rate as regular income. I am retired now and collecting social security.

Terry Says

All money that comes out of a "qualified" (pre-tax) retirement plan is considered ordinary income.  So yes, the dividends are considered part of the assets of the plan and mixed with the assets of the plan, and ALL withdrawals are taxed as ordinary income.  Since there is no special taxation benefit for dividends on stocks these days, it really doesn't matter how the money in the plan is generated.



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