How do IRA and 401(k) Withdrawals Work?
Wednesday, March 20th, 2013
Chances are you’ll spend a significant portion of your working years saving for retirement by building up the balances in your traditional IRA or 401(k) account. Perhaps you’ll even save in both types of accounts. Over the course of your career (or careers) you may even accumulate several 401(k) or IRA accounts.
When you reach your retirement age, whatever that age may be, you’ll start withdrawing these funds. It’s important to understand all of the rules and restrictions relating to IRA and 401(k) withdrawals; you do have flexibility in the timing and amounts of your withdrawals, but not complete freedom.
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What Is a Required Minimum Distribution?
Wednesday, August 24th, 2011
One of the most important features of an IRA or 401(k) is its tax benefits. With an IRA, investment gains are not taxed until they are withdrawn. The same is true for a 401(k), and contributions also come from pre-tax dollars.
Once you retire, it’s smart to keep as much of your money in your retirement account as possible while still having enough to live on. But even if you’re working part-time and have sufficient income from other sources, you won’t be able to avoid taxes forever. The IRS eventually wants you to withdraw some funds and pay taxes on...
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