Isn't the money that is withdrawn from a 401(k) taxed as ordinary income? (Are you assuming it will be taxed at a lower rate--that of long term capital gains?)Yes, I assumed that a withdrawal from a 401k is taxed as ordinary income. When I plug in $40k of income into the HRBlock tax calculator, I get $4621 in federal tax. http://www.hrblock.com/taxes/tools/quickcalc/index.htmlThe standard deduction, personal exemption and progressive tax lower the effective tax rate significantly below the 25% marginal tax rate.-murray
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