No. of Recommendations: 0
I am eligible to opt for either 5 or 10-year averaging on my 401K's (no
LTCG). Did I hear that after 1999 there will no longer be an option?

I'm not sure about that.

Also the amount involved indicates that 5-year averaging is advantageous today.
In two or three years will 10-year averaging taxes change significantly
(will max rate decline)?

I don't think anyone can predict that with accuracy.

Also is it better to wait 5-6 years when minimum
withdrawels are required? Tax rate will be 28%
on required minimum withdrawels.

You can Lump Sum Withdraw about $300,000 at an average tax bite of 22.6%. Depending on your assumptions on growth, need for the funds, possibility of a tax free step-up basis at death, no estate tax on the prepaid 4972 tax, and tollerance to invest in a tax managed growth fund, and tollerance of paying a lot of taxes now, the lump sum withdrawal might be more advantageous. If so, Don't wait as the funds will grow, increasing the current tax.

If you need the funds to retire on, and want to play daytrader with the funds, convert them to a self-directed IRA and withdraw only the minimum each year. Ed
Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.