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Have you looked carefully at what tax rate(s) the initial distribution push you into? Do you have other income or events expected to increase your taxable income? Sounds like you are going to eat a really large tax burden this year.

Being retired, I can control my income to a large extent. I have been taking withdrawals from my 401(k) using the rule of 55 for living expenses and tax withholdings. (Using my 401(k) this way is the reason I didn't do the NUA shortly after I retired, which was another allowable trigger point.) I typically do the tax withholding in December. The withholding for this distribution will be less than that, so I will adjust the December withholding to account for that. Part of the cash that I will generate by selling the company stock to get down to my desired allocation can be used for living expenses, instead of additional withdrawals from other retirement accounts.

I have also been doing Roth conversions (also typically in December), so I will need to adjust the Roth conversion amount this year to account for the NUA basis distribution to avoid going over the top of my desired bracket.

AJ
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