At 75 the IRS Sets Withdrawals on a $900,000 401(k): The Strategy to Empty It First
A 24/7 Wall St. example describes a 62-year-old with $900,000 in a traditional 401(k). If the account is left untouched, the IRS begins setting required minimum distributions at 75, the age that applies to those born in 1960 or later. With 5% annual returns and 13 years to go, emptying it would require withdrawing about $91,250 a year, which would cost roughly 7% in federal tax today. Left intact, the account would grow to about $1.7 million by 75.
In 40 seconds
- The required minimum distribution (RMD) starting age is 75 for anyone who turns 74 after December 31, 2032.
- With 5% annual returns and 13 years until 75, emptying $900,000 requires withdrawing about $91,250 at the start of each year.
- Untouched, the account would grow to about $1.7 million and the first RMD would be roughly $69,000, using a divisor of 24.6.
Read the full story at 24/7 Wall St.
IASummary generated by artificial intelligence from a story by 24/7 Wall St.. It may contain errors: the original source prevails.
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