A 62-year-old retiree can withdraw up to $66,500 annually from a 401(k) at just 12% federal tax, moving roughly $532,000 before RMDs begin.
RMDs force a $1.2 million account holder to withdraw $45,283 in year one, potentially pushing effective tax rates to 41% when Social Security is included.
Leaving $900,000 untouched grows it to roughly $1.7 million by 73, creating a first RMD larger than the current 73-year-old's and repeating the same tax trap.
Building a portfolio and living off one are two completely different skills, and almost ******* ody teaches the second. This problem is what The Definitive Guide to Retirement Income helps, and it is free today. Read more here. (Sponsor)
Picture two retirees. One is 62 with $900,000 in a traditional 401(k). The other is 73 with $1.2 million. Most people would take the bigger account. The smaller one is worth more because the 62-year-old still determines when that money gets taxed and at what rate. The 73-year-old has already gave that decision to the IRS.
#rmds
RMDs force a $1.2 million account holder to withdraw $45,283 in year one, potentially pushing effective tax rates to 41% when Social Security is included.
Leaving $900,000 untouched grows it to roughly $1.7 million by 73, creating a first RMD larger than the current 73-year-old's and repeating the same tax trap.
Building a portfolio and living off one are two completely different skills, and almost ******* ody teaches the second. This problem is what The Definitive Guide to Retirement Income helps, and it is free today. Read more here. (Sponsor)
Picture two retirees. One is 62 with $900,000 in a traditional 401(k). The other is 73 with $1.2 million. Most people would take the bigger account. The smaller one is worth more because the 62-year-old still determines when that money gets taxed and at what rate. The 73-year-old has already gave that decision to the IRS.
#rmds
5 days ago
