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Coffee Shop
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<blockquote data-quote="simme" data-source="post: 1691716" data-attributes="member: 40418"><p>I don't think so. Withdrawals from a regular 401k are taxed as ordinary income - same as wages. After you retire, you must start withdrawing it by age 70 1/2 years (recently changed to 72 years in the covid acts) and withdraw at least the minimum amount as established by the government rules. Minimum withdrawal rate is determined by life expectancy tables to try to get all the money withdrawn and taxed before you die. This is to ensure that the government gets to collect taxes on it instead it it growing for your heirs. If you mess up and don't take enough out during a year, there is a severe tax penalty for that year. Taking money out of a 401k early (before 59 1/2 years old) will result in a 10% penalty in addition to taxes except in a few situations (hardship withdrawal).</p></blockquote><p></p>
[QUOTE="simme, post: 1691716, member: 40418"] I don't think so. Withdrawals from a regular 401k are taxed as ordinary income - same as wages. After you retire, you must start withdrawing it by age 70 1/2 years (recently changed to 72 years in the covid acts) and withdraw at least the minimum amount as established by the government rules. Minimum withdrawal rate is determined by life expectancy tables to try to get all the money withdrawn and taxed before you die. This is to ensure that the government gets to collect taxes on it instead it it growing for your heirs. If you mess up and don't take enough out during a year, there is a severe tax penalty for that year. Taking money out of a 401k early (before 59 1/2 years old) will result in a 10% penalty in addition to taxes except in a few situations (hardship withdrawal). [/QUOTE]
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