I want to take out my money from Vanguard (401K). Do I need to pay any penalty or tax ? I retired, I'm 68. ?

Question

I want to take out my money from Vanguard (401K). Do I need to pay any penalty or tax ? I retired, I'm 68. ?

Answer 1

The withdrawal will be included in your income except for after tax investments. You will not owe penalty.

Read http://taxipay.blogspot.com/2008/08/elec...

Answer 2

You can start taking withdrawls now without penalty since you are past 59 1/2. You will now pay taxes on it. I'm 62, not yet retired. I took $3000 out of mine to remodel my bathroom. I did pay taxes, but no penalty

Answer 3

Since you are over the age of 59.5, you will not owe the 10% penalty for an early withdrawal.  Your distribution is subject to ordinary income tax.

Depending on your other income, and the amount of your withdrawal, you may have tax to pay on your 401k distributions.  But in certain instances you can avoid tax.  For example, if you have only Social Security benefits, you could take out a withdrawal of up to $10,200 (if single) and owe zero income tax.

The amount and timing of your 401k withdrawals has a huge effect on your income taxes.  Before taking your withdrawal, it would be smart to figure your potential tax before making your decision.  

Answer 4

You will owe tax on withdrawals but no penalty since you are over 59 1/2.

Answer 5

If the money is in a 401K it is pre-tax money, right?  (taken out of your paycheck, company match-etc).  You will have to pay taxes on it when withdrawing.  I'm not sure about penalties though, I believe it is applicable before age 65.  It would be best to check with an accountant.