If you are receiving regular payments you do not have to worry about the lump sum, however-
Lump-sum distributions can kick you up into a higher tax bracket.
- For example, if in retirement you have $9,000 per year in taxable income, you'd likely be in the 10% tax bracket in 2017.
- But if you take out a $200,000 lump-sum withdrawal, you'd probably find yourself in the 33% bracket.