Hi JoanK1,
Hope you are having a good day! The pretax contributions to a retirement account , typically result in lower tax when you retire and withdraw because your income is typically lower when you retire, and thus you are in a lower tax bracket.
Since you have funds in a pretax plan, such as a 401(k) or funds in an employer-funded pension, withdrawals you make from these plans after you retire are generally subject to income tax. You can usually have the plan administrator deduct taxes from your distributions — but, depending on your tax bracket, it may not be enough to cover your bill.
Ultimately, your tax rate is based on all your taxable income during the year. If you have multiple sources of retirement income, you'll save on your taxes in retirement if you limit distributions from pretax plans to only the amounts you need or are required to withdraw.
Unfortunately if you need to withdraw a larger amount from the retirement account, there is not way to avoid from reporting it as taxable income. Here is a great resource,
I hope you find this information helpful!
Connie
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