Income Tax on 401K withdrawls without Earned Income

[cspfire2024]

Hello Folks,

This is more of a curiosity question for my future 🙂

Let's assume, when and if I retire after 60 years, I have no earned income for an year.  Let's say we would have may be interest / dividend income that's about it, < $500.

Now, let's say, I withdraw about $60K from my 401K account.

I guess, this 60K will be long term capital gains.  If yes - is it the case that I will be paying zero tax on this?  Since capital gains tax < 80K is 0%.  I am sure, this will not be the case and I may be missing something obvious.  Please let me know what am I missing in this equation, because taxes are given and I wouldn't believe myself it my assumption of 0% tax is possible 🙂

Thanks

[ColeenD3 · Accepted solution]

Distributions from a 401k do not get capital gain treatment, it is ordinary income. You will be taxed according to your tax bracket.