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I've never heard of this and it seems unlikely to me that a bank would accept it. Granted, my understanding of collateral has at least as many holes in it as your understanding of 401(k)'s. But why would they accept as "collateral" an account you could then turn around and empty?

Also, what do you mean by "transferring this amount in 401K shares to the bank"? What is a "401K share"?

73k a year in RMDs is pretty close to the 100K your hypothetical retiree needs. It would be less complicated to arrange for the other 27k to be in a Roth IRA.
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