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10-year averaging of 401K accounts is available to those born prior to 1936. 5-year averaging is available to everyone until the end of this year. However, there are other rules and conditions - get IRS Publication 575 (start on page 21)and form 4972. Starting in 2000 only 10-year averaging will be available and only to those born before 1936. Usually the tax bite will be reduced using income averaging. However, your age, your pre and post tax contributions,the amount of all your 401K accounts, whether some of the 401K is in company stock, whether some of it is in pre-1974 gains, etc. all can impact the taxes. Obtain the form and caculate both ways to see which is advantageous if you qualify.
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