How to use 40l(k) for assisted living

I am 82 and need my 401k for an assisted living place how much will i be taxed

Terry Says:  Well, first congratulations for having saved so much money that your 40l(k) still has money left in it!  I presume you have been taking the minimum required distributions for the past decade — ever since the year in which you reached age 70-1/2.  If you want to take ALL of the remaining money out to use for entrance to an assisted living facility, you can take as much as you want — BUT you will be taxed on that amount as ordinary income.  If you take “too much” out, it could put you in a higher tax bracket.  That might be enough to increase your Medicare monthly premiums, and perhaps impact other benefits.

I suggest you consult an accountant — a CPA — to give you advice specific to your situation.  It might be better to use a mix of your after-tax savings and only some of the money from your retirement accounts.  By the way, this might also be a good time to “roll over” your 40l(K) directly to an IRA Rollver account at Vanguard or Fidelity.  DONT TAKE THE MONEY IN THE FORM OF A CHECK — or it will all be taxable.  But contact them at 800-Fidelity or 800-Vanguard and they will handle the rollover.  Then they can put all the assets in a safe money market fund, where you won’t have the possibilty of loss that you can’t afford at this stage of life.  Be sure to name a beneficiary for your IRA Rollover account.  This is a lot easier than it sounds — they will do all the work for you, including contacting your company 40l(k) plan to get things going.  The IRA will have the right Money Market fund — something most 40l(k) plans don’t have as they are designed to grow your assets over the long run.