topic Re: Retirement funds in Personal Finance

Retirement funds

Hawkz — Mon, 09 Jan 2023 14:44:36 GMT

Wife recently retired. 401k ect. put into low risk stocks. Is this $$ taxed at this point? TIA.

Re: Retirement funds

Horseshoez — Mon, 09 Jan 2023 14:51:34 GMT

@Hawkz wrote:
Wife recently retired. 401k ect. put into low risk stocks. Is this $$ taxed at this point? TIA.

Did you keep the money within the 401(K) account, or did you take the money out and move it into a brokerage account?

Re: Retirement funds

pizzadude — Mon, 09 Jan 2023 15:03:43 GMT

Agree that we need more information. Is your wife at the point where she's taking required minimum distributions yet ?

As long as the money is in a 401k there should be no taxable event.

Re: Retirement funds

Hawkz — Mon, 09 Jan 2023 15:50:39 GMT

Took $$ out. Was going to move it to savings account but finance guy said it will be taxed. ??

Re: Retirement funds

Horseshoez — Mon, 09 Jan 2023 15:58:15 GMT

@Hawkz wrote:
Took $$ out. Was going to move it to savings account but finance guy said it will be taxed. ??

Yup, sounds like you're on the hook for the taxes.

Re: Retirement funds

coldfusion — Mon, 09 Jan 2023 16:10:59 GMT

@Hawkz wrote:
Took $$ out. Was going to move it to savings account but finance guy said it will be taxed. ??

You should expect the entire amount to be taxable, also because the distribution was made to her directly there was likely a 20% witholding. If the withdrawal was executed less than 60 days ago discuss with your finance guy if there would be a benefit to rolling over the entire amount into a Rollover IRA. If so, you wouldn't get a 20% witholding back immediately but it would get accounted for as part of your tax filing.

The only question would be is if the withdrawal was completed before or after Jan 1, as that could dictate the correct tax year. Your finance guy should be able to give you info more specific to your wife's individual case.

Re: Retirement funds

OniStringer — Mon, 09 Jan 2023 20:30:27 GMT

@Hawkz wrote:
Took $$ out. Was going to move it to savings account but finance guy said it will be taxed. ??

I do believe it will be taxed. Because you took it out.

Re: Retirement funds

SouthJamaica — Mon, 09 Jan 2023 21:17:26 GMT

@Hawkz wrote:
Wife recently retired. 401k ect. put into low risk stocks. Is this $$ taxed at this point? TIA.

1. Normally if the funds are rolled over out of the 401k into an IRA they would not be taxable and if they are transferred to a non-IRA account they are taxable.

2. But I believe there is a brief window of time in which they can be rolled back into an IRA and thus avoid taxation. If the taxation is an issue for you and the Mrs. I would advise you to immediately consult with an accountant.

Re: Retirement funds

Bill77 — Mon, 09 Jan 2023 21:45:14 GMT

When you withdrawal from a 401k it is a taxable event and considered ordinary income. May not be as bad as it sounds if you don't have other income.

Re: Retirement funds

FireMedic1 — Mon, 09 Jan 2023 23:37:57 GMT

Over 59 1/2? If so theres a few ways to aviod fees if put into a IRA.

Re: Retirement funds

AndySoCal — Tue, 10 Jan 2023 02:02:49 GMT

@Hawkz

The link below may help answer your question...

https://www.nerdwallet.com/article/investing/401k-rollover-ira-guide