Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 0

Thanks for this reply. I was unaware of RMD's. This is definitely something to include in the planning. Just a quick look at an online RMD calculator on the internet, it seems that a very low percentage of the 401K balance is required to be withdrawn, only around 3.6 percent in my hypothetical case.

For example, according to one calculator I found, if I had been born in 1945, and my 401K balance reaches $2M in 2015 (when I turn 70 1/2), I would be required to withdraw a minimum of $73K that year. Not that much.

But, as with everything else, when it comes to taxes, this factor could change in the future so it's something to keep in mind, as you suggest.

As for taking a loan by using the retirement account balance as collateral, and thereby reducing my tax rate (ordinary income tax rate), I am still looking into this scenario and would be interested if anyone knows anything about how to accomplish this.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.