Ask Terry Questions Should I stop having taxes taken out ?

Should I stop having taxes taken out ?

By Terry Savage on September 22, 2020 | Financial Planning / Retirement

Ms. Savage,
I am 72 years old in good health. I have social security, a part time job and taking money out of my 401 every month of $300.00. Every year I receive a refund for all the taxes that are taken out from the above income I mentioned, since I make under $30,000 a year. Can I stop having taxes taken out since I get them back every year. With the extra money every month in social security and my part time job I then might be able to just take out $100. a month from my 401 or maybe stop taking money all together from the 401.
I have no mortgage or car payment and two credit cards, one with a zero balance the other under $300.00

Thank you for any advice you can give,

Terry Says

OK, well first of all, starting NEXT year, you are going to be required to take withdrawals from your 40l(k) and the amount you must take every year (or monthly) will be set based on your age and the balance in your account at the end of the previous year. You probably should have taxes deducted from that payment, as you can always file to get the money back if too much is withheld. But if it makes a real difference, and you think you will have income under the required filing level, ($12,200 for a single person in 2012), you can ask them to take out less.

money

ASK TERRY

a personal
finance question