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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