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Financial Planning / Tax Strategies


Subject:  Re: 401k withdrawal taxes at retiremtent Date:  7/10/2013  1:28 PM
Author:  synchronicityII Number:  118840 of 123001

The reason I want to cash out the 401k is to avoid paying higher taxes on it after I start drawing Social Security. The lower tax bracket would save me 10% in taxes. Then there is also the matter of estate planning on which, after my demise, it will be a lot easier for my heir to access his inheritance if it is in a cash acccount rather than tied up in a 401k or IRA.

Rolling the funds into a Roth may be an option, but I believe that I would then have to wait 5 years to withdraw any money from it. I am also not sure how inheritance law handles a Roth.

As other knowledgeable posters have noted, you REALLY need to talk to a professional who knows about retirement and estate planning. As noted, there are a number of ways to mitigate increased taxes which may result from Required Minimum Distributions (RMDs) being made while receiving social security bene