topic Retirement in Get your taxes done using TurboTax

Retirement

Smithcel — Tue, 25 Mar 2025 17:51:29 GMT

I am 62 year old. Most of my retirement dollars is in a traditional pre tax account. I would like to take at least 30K to get rid of debt. My concern is taking money out because I have less than 400K. Any thoughts I know here is no penalty at this age, but I will have to pay taxes correct?

Re: Retirement

VolvoGirl — Tue, 25 Mar 2025 17:54:07 GMT

Yes it will be taxable. It will add to your other income and will probably push you into a higher tax bracket. What does “less than 400K” have to do with it?

Re: Retirement

Vanessa A — Tue, 25 Mar 2025 17:54:53 GMT

Yes. You will have to pay ordinary income taxes on the distribution. You are correct, there is not a penalty, just your regular income tax. There is not a way to avoid that if you want to take the money out to pay off debt.

The best thing to do is to compare your taxes that you will pay on the amount you take out to the interest you will be saving.

Re: Retirement

Smithcel — Tue, 25 Mar 2025 17:56:23 GMT

Hesitating because 400K is under my goal.

Re: Retirement

Smithcel — Tue, 25 Mar 2025 18:00:04 GMT

Not sure I understand this statement....Sorry, can you provide an example.

"The best thing to do is to compare your taxes that you will pay on the amount you take out to the interest you will be saving"

Re: Retirement

fanfare — Tue, 25 Mar 2025 18:09:16 GMT

Do not invade your retirement funds for any reason, unless a dire, severe emergency.

To pay down debt, find other ways

such as

going back to work.

@Smithcel

Re: Retirement

JohnB5677 — Tue, 25 Mar 2025 18:12:06 GMT

What other income do you have?

Are you in a zero tax bracket?

Are you still working?

Re: Retirement

Smithcel — Tue, 25 Mar 2025 18:15:16 GMT

I am still working FT. I am not working a 2nd job