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401(k) plans
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- 1Couple's $480,000 Retirement Plan Faces Hefty Tax Bill at 73●A Couple Who Retires at 63 With $480,000 Between Two 401(k)s and Lives on His Military Pension for Ten Years Can Expect First RMDs of $29,500 at 73, Every Dollar Taxable on Top of the Pension
A retirement scenario making the rounds has a couple retiring at 63 with $480,000 split between two 401(k)s, living for ten years on a military pension. When required minimum distributions kick in at 73, the first withdrawal would be roughly $29,500 — all of it taxable as ordinary income, stacked on top of the pension payments. The example highlights how deferring withdrawals lets 401(k) balances grow while shifting a large tax burden into retirement's later years.
- 2How to draw $48,000 a year from a $1.2 million 401(k) tax-efficiently▼How a 63-Year-Old Can Pull $48,000 a Year From a $1.2 Million 401(k) Without Triggering IRMAA or Taxing Social Security
Financial commentators are outlining a retirement withdrawal strategy for a 63-year-old with a $1.2 million 401(k) who wants $48,000 a year in income. The plan focuses on keeping taxable income low enough to avoid higher Medicare IRMAA premiums and prevent Social Security benefits from being taxed once claims begin. It highlights ongoing interest among near-retirees in sequencing withdrawals and managing income thresholds.