Do you pay tax on 401k money when you get it out after 60 or62?

Question

Do you pay tax on 401k money when you get it out after 60 or62?

Answer 1

You can withdraw money if you are 591/2 without the penalty. You still must pay the income tax on this money.

Answer 2

You do not pay any early withdraw penalties but you do have to pay income tax on the withdraws. You did not pay taxes on the money when you put it into the 401(K) so you have to pay taxes when you take the money out.

Answer 3

As others have said, you have to pay income taxes but not penalty, since you are over 59 1/2.  

To minimize the income taxes owed, consider rolling over the money to an IRA and withdrawing only what you need each year.  The smaller withdrawals will help you stay in a lower tax bracket.  Some 401(k) plans only allow a single lump-sum distribution and if you paid all the taxes in a single year on a very large distribution, you could be paying much more for income taxes than if you spread the taxable income over many years.

Answer 4

Yes.