Yes, it is good to withhold taxes on any retirement distribution. Some employers require a 10% withholding on a retirement withdrawal. You may want to withhold taxes for the following reasons:
- Under 59 1/2 years old - this is considered early withdrawal and is subject to 10% penalty on top of your regular income tax rate.
- It increases your income tax bracket.
See this link, how does retirement plan withdrawal affect my taxes?
