Join Early Retirement Today
Thread Tools Search this Thread Display Modes
457 and tax implications of drawing money
Old 07-21-2016, 08:14 AM   #1
Dryer sheet aficionado
Join Date: May 2011
Location: Richardson TX
Posts: 33
457 and tax implications of drawing money

So Im a firefighter and about to retire next year. I have a deferred comp 457 account that will supplement my monthly retirement check.

What are the tax implications in drawing money from my 457? Obviously I will owe federal tax but what I was specifically wondering was whether or not there was any difference in the funds Im invested in and what the tax implications are. For example I have my money invested over a range of funds, from stock funds to tax-free municipal bonds. When I start pulling money will it make any difference what funds I'm in? Will I have to specify which fund to pull money from or does it all just come off the top, so to speak?

rocks911 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-21-2016, 09:02 AM   #2
Recycles dryer sheets
fidler4's Avatar
Join Date: Mar 2013
Posts: 179
Congrats on your upcoming retirement. I believe withdrawals from 457 plans are taxed as regular income regardless of what funds you are invested in.

Sent from my iPad using Early Retirement Forum

fidler4 is offline   Reply With Quote
Old 07-21-2016, 09:13 AM   #3
Recycles dryer sheets
Join Date: Apr 2016
Location: Dutchess County
Posts: 237
I draw from my 457 and they withhold 20% fed and I have them withhold 5% state.
Just_Steve is online now   Reply With Quote
Old 07-21-2016, 10:22 AM   #4
Dryer sheet aficionado
Join Date: May 2011
Location: Richardson TX
Posts: 33
Very helpful, thanks
rocks911 is offline   Reply With Quote
Old 07-21-2016, 10:49 AM   #5
Thinks s/he gets paid by the post
timo2's Avatar
Join Date: Jul 2011
Location: Fort Collins
Posts: 1,243
It depends upon the state, of course. Since Texas has no state tax, no worries for you. In Colorado where I live the first $20K of a pension gets an exception from state tax for folks over age 55. New Mexico, to where I will retire, only has exemptions from state tax for people that earn less than $55K (joint filing), so that rules me out from that one.
"The natural inclination of every boat everywhere is to sink".......Nicole Pasulka
timo2 is offline   Reply With Quote
Old 07-21-2016, 02:24 PM   #6
Recycles dryer sheets
Join Date: Mar 2008
Posts: 78
Withdrawals on 457 money is taxed as income like an IRA. The mutual funds that the money came from is not relevant.

frank2009 is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
drawing money from life insurance frank Health and Early Retirement 8 08-30-2015 06:06 AM
ESPP Help on tax implications and advice RDamien FIRE and Money 2 01-11-2011 08:12 AM
how to put drawing in a post ? JohnEyles Forum Admin 6 10-12-2006 12:38 PM
401k ?'s and tax implications for self-employed.... thefed FIRE and Money 6 12-17-2005 08:42 PM
real estate purchase and tax implications question vicky FIRE and Money 10 02-15-2005 06:50 AM


All times are GMT -6. The time now is 07:34 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.