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Level 4

401 k lump sum withdrawal

i'm 60 yrs oldretired, company closed and i'm going to take my 401 lump sum of$260000 . how much will that effect what i have to pay in for taxes next year. i know i will be in a different tax bracket. Will the taxesthey take out on my 401 be included with my work taxes for the year when i file.

2 Replies
Level 20

401 k lump sum withdrawal

Do you need all of it?  You can rollover part or all to a Traditional IRA account to defer the taxes.  You have 60 days to do a rollover.  The best way is to have it directly transferred from the 401K.

 

Yes, the gross amount and taxes withheld get reported on your tax return.  You will get a 1099R at the end of the year to enter into your return.  

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Level 18

401 k lump sum withdrawal

don't take a lump sum from a 401k. instead do a trustee-to-trustee transfer to an IRA you set up. the new trustee will assist you with the paperwork.

then take small distributions when and if needed.