Withdrawal from 401K Account?

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I'm 67 and retired over a year now. Low budget person and everything is paid off. Just have normal monthly bills and making do with SS. Have enough $ to live a few more years in my checking account. (shy of nursing home, etc.) But my health is not that great, so I don't expect to live many more years to become an old man. I have three 401K accounts from previous employers.

Last I checked (few years ago) with one of the 401K accounts, they deducted $40 for every check or deposit they gave me. So that may have changed.
I'm just thinking on spending some of the $ before I die. Maybe just be more generous to my kids at Christmas and birthdays or whatever.

But $40 per month will not cut it for me in expense. Say I draw out $12,000 once per year, instead of $1000 per month? Have not talked with my tax lady either yet. Any advice from those with more knowledge than myself? I'm no financial whiz for sure. Any tax advantage one way or the other, or will it all even out at the end of the year? Just using these figures for easy thinking people as myself.
 
Cannot see how a once/year would have different tax liability than monthly.

I don’t know how to find a good financial advisor, but it sounds to me worthwhile, just to make sure you have your assets allocated how you want them, and for withdrawal rate advice.
 
I don't think it will make any difference to Uncle Sam when you pay your taxes if you took it lump sum annual or monthly. $40 per check seems steep. I'm trying to consolidate my retirement accounts.
 
There are really no tax consequences to taking one larger withdrawal as compared to monthly withdrawals. My father in law always took a minimum required distribution in one check at the beginning of the year. The total calendar year withdrawals are what gets reported to the IRS and you are taxed on.

Disclaimer: I am not a tax advisor, nor have I stayed in a Holiday Inn lately.
 
I'm 67 and retired over a year now. Have enough $ to live a few more years in my checking account. But my health is not that great, so I don't expect to live many more years

[bank] deducted $40 for every check or deposit they gave me
I'm just thinking on spending some of the $ before I die. Maybe just be more generous to my kids at Christmas and birthdays or whatever.
I have chronic health issues and am not yet retired. I won't tell you to "save or spend". I simply suggest you estimate your lifespan and plan accordingly. That's my plan. Build in some wiggle room, in case you exceed your expectations or have special needs later.

As for giving to the grandchildren, I'd suggest against it. Giving money away to family is a key financial mistake that people only "think" they can afford.
 
There are really no tax consequences to taking one larger withdrawal as compared to monthly withdrawals.

If one pays appropriate tax at the start of the year, there is no tax consequence. If tax is underpaid, there can be penalties.

Also, the IRS may conveniently become confused as to when income is paid, vs when taxes are paid. And put one through "the process". My point: What ever you do, document it well. I got a bonus at the end of the year, and the IRS insisted I should have paid more tax during the year. NONSENSE.
 
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Taking money out of 401K monthly or annually won't make a difference (as far as overall tax liability) but you will miss at least %4 safe dividend (these days) if you take all the money out instead of leaving it in there and take it monthly.

What kind of scam artists are charging you $40 per withdrawal?
Transfer your 401K to Schwab or somewhere else.
 
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It seems all of us are paying 'way more' in taxes.....and getting nothing for it.
I’m not retired but I always remind myself tax tables aren’t changing throughout the year. My wife going back to work bumped us into the next bracket. I know when I get a bonus I net < 63%—but no way are we in the 37% bracket. Im positive.

I’m wondering if some of you are seeing what I do when I get a bonus. It’s because the tax software assumes this is a 1/26 income rate, which it isn’t. I’m just guessing since the tax tables aren’t dynamic. So even if we’re in the 24% tax bracket, only some of our income is taxed at that. I am positive none of our income is in the 37% bracket. But with the bonus, it’s withheld at that as if I’ll get this bonus 26 times a year. That’s why we file once a year and reconcile. My .02 ymmv
 
Not a tax person, not your financial adviser or lawyer. That understood, I appreciate your mortality concerns. If I were similarly situated, I'll pull out everything not needed for sustaining life, and go have a good time.

I have a very dismal view of short and long term US currency, inflation, corrupt stock markets, and so forth. The world is changing fast. I've written at length on this forum on this topic. You can search my posts if you want more on that.

I'd keep enough available relatively liquid for necessary expenses, turn a lot of it into physical easily liquidated assets (precious metals, for instance), build a 2 year food pantry, pay taxes up front so you're not homeless, and go spend the rest on whatever makes you happy.

Good luck to you.
 
Without knowing what you want to accomplish the only thing I have been able to figure out with mine is to take your annual SS payment + any interest you get on taxable savings and make 1 withdraw to get your total to 40k. You may be able to take a bit more but this is the level where you start to pay taxes on your SS. There may be a bit of wiggle room depending on your individual situation which is why its important to talk to someone that understands taxes in retirement and not just a preparer that plugs numbers into a program. There are ways to minimize the tax bite and I try and wait till I find out exactly what all my income has been all year and make the largest tax friendly withdraw in Dec.
 
Also if you have a HSA (Health Savings Account), you can reimburse yourself for the Medicare $ deducted monthly out of your SS. That would be another source of income if needed and you don't have to pay tax on it since its a medical expense.

FYI, At your age, you can also withdrawal from HSA for non-medical expenses and pay tax just like 401K. Most if not all HSA accounts come with a Visa card so it's easy to spend the $ with no fee. Not suggesting you tap into HSA money for non-medical expenses but it's something lots of people don't know.
 
I'm 67 and retired over a year now. Low budget person and everything is paid off. Just have normal monthly bills and making do with SS. Have enough $ to live a few more years in my checking account. (shy of nursing home, etc.) But my health is not that great, so I don't expect to live many more years to become an old man. I have three 401K accounts from previous employers.

Last I checked (few years ago) with one of the 401K accounts, they deducted $40 for every check or deposit they gave me. So that may have changed.
I'm just thinking on spending some of the $ before I die. Maybe just be more generous to my kids at Christmas and birthdays or whatever.

But $40 per month will not cut it for me in expense. Say I draw out $12,000 once per year, instead of $1000 per month? Have not talked with my tax lady either yet. Any advice from those with more knowledge than myself? I'm no financial whiz for sure. Any tax advantage one way or the other, or will it all even out at the end of the year? Just using these figures for easy thinking people as myself.
I would not presume to try and tell you what to do, but in your situation I would roll all my 401k accounts into a rollover IRA with Vanguard, Fidelity or Schwab. These accounts won't charge you a fee, and I know Fidelity (and others) even offers free stock trading. There would not be any tax liability for the rollovers. Then you could take withdrawals however you wanted, without paying any fees. Plus you have the added bonus of having complete control of your accounts, without your former employers having any hooks in them.
 
I would not presume to try and tell you what to do, but in your situation I would roll all my 401k accounts into a rollover IRA with Vanguard, Fidelity or Schwab. These accounts won't charge you a fee, and I know Fidelity (and others) even offers free stock trading. There would not be any tax liability for the rollovers. Then you could take withdrawals however you wanted, without paying any fees. Plus you have the added bonus of having complete control of your accounts, without your former employers having any hooks in them.
This is good advice. By rollover, you need to follow the rules. Open the IRA at the new place and have them roll the 401k into it by filling out the rollover forms.

My old employer forced me to roll the 401k into an IRA. I wasn't really paying any attention to it and was shocked how much money was in my 401k.
 
Something is wrong here.
Not necessarily. Before I retired I had a house payment, was paying mortgages on income real estate, and wasn't collecting Social Security. Now I'm retired I have no real deductions, no mortgages on my rentals, and am collecting a small fortune from Social Security (emphasis on small, but its still significant). Required Minimum Distributions from the IRA start next year, but to get a leg up on them I've been rolling from the ordinary IRA to a Roth.
Maybe it's because I have to write a check quarterly (rather than withholding), but it sure seems like I'm grossing more and paying more taxes than when I was working.
 
This is good advice. By rollover, you need to follow the rules. Open the IRA at the new place and have them roll the 401k into it by filling out the rollover forms.

My old employer forced me to roll the 401k into an IRA. I wasn't really paying any attention to it and was shocked how much money was in my 401k.
Leo's advice is a good one. A self directed IRA is still tax deferred until you make withdrawals. Another thing to think about is to find a financial advisor that is a fiducirary. They may be able to help you select monthly paying dividend investments that will help preserve the principal balance that you already have.
 
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