- Sep 12, 2012
- Reaction score
- 50 miles south of Kansas City
You are 100% correct.
On top of the penalty it is added to your yearly income before 59 1/2.
That can incur a whole nuther bunch of tax liabilities. After 591/2 it’s taxed as ordinary income.
On withdrawal at 72 it has to be 10% of the account.
The biggest mistake I see retirees make is forgetting there is no raises coming unless you give it to yourself. The SS raise isn’t going to keep up.
Here's a situation where one is required to take the 10% each year, however if the money is not needed it can be reinvested and available whenever it is needed (and only pay taxes then on the interest growth then).