457 and tax implications of drawing money

[rocks911]

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?

 

[fidler4]

Congrats on your upcoming retirement. I believe withdrawals from 457 plans are taxed as regular income regardless of what funds you are invested in.


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[Just_Steve]

I draw from my 457 and they withhold 20% fed and I have them withhold 5% state.

 

[rocks911]

Very helpful, thanks

 

[timo2]

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.

 

[frank2009]

Withdrawals on 457 money is taxed as income like an IRA. The mutual funds that the money came from is not relevant.