✉news BusinessPersonal Finance first seen 1 d ago, last 1 d ago, peak #12
Large 401(k) Balances Quietly Raise Retirees' Tax Bills
Original: How a 401(k) Balance Over $900,000 Subtly Adds $5,200 a Year to a Single Retiree's Tax Bill Once Social Security Starts
Retirees with 401(k) savings above $900,000 can face roughly $5,200 more in federal taxes each year once Social Security benefits begin, according to a new analysis. Because Social Security benefits become partially taxable when combined income crosses certain thresholds, required withdrawals from a large retirement balance push single filers over those limits, quietly increasing their annual tax bill.
Why now: Retirees planning withdrawals are newly attentive to how large 401(k) balances interact with Social Security taxation rules
Social Security401(k)Internal Revenue Service
Evidence
- How a 401(k) Balance Over $900,000 Subtly Adds $5,200 a Year to a Single Retiree's Tax Bill Once Social Security Starts · 24/7 Wall St.
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