Skip navigation

Stretch This

A complete liquidation of a person's retirement account can trigger a huge income tax liability, significantly diminishing assets available for investment. For example, a person who withdraws $100,000 from a 401(k) plan will have to report $100,000 of taxable income, producing combined federal and state income taxes of roughly $40,000 and leaving only $60,000 to invest. Had the $100,000 stayed in
Resources

A complete liquidation of a person's retirement account can trigger a huge income tax liability, significantly diminishing assets available for investment. For example, a person who withdraws $100,000 from a 401(k) plan will have to report $100,000 of taxable income, producing combined federal and state income taxes of roughly $40,000 and leaving only $60,000 to invest. Had the $100,000 stayed in the plan, the $40,000 would have generated significant investment income, but the taxation of the

Subscription Options

Please Log in if you are currently a Trusts & Estates subscriber.


If you are interested in unlimited article access for one year, please select Annual Subscription below.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish