When I retire, I will be fortunate to have a pension, plus saved assets in after tax accounts, some Roth IRA conversions I did from a previous employer Rollover IRA, and my current 401k.
In retirement, how are taxes assessed & paid for as you collect pension and begin to take 401k distributions?
Are there withholdings from pension distributions that should be based on estimated taxes? Or, do you 'settle up' for taxes at the end of the tax year?
For 401k distributions, should I plan to withdraw what I need for actual expenses plus estimated taxes, or 'settle up' the tax bill later?
And - for those that draw down for expenses in yearly increments - does that big single distribution have any tax implications? If, for example, I need $50K for the year, before taxes, does that single distribution check have a bigger tax impact for withholdings compared to spreading it out over monthly distributions?
Thanks!
In retirement, how are taxes assessed & paid for as you collect pension and begin to take 401k distributions?
Are there withholdings from pension distributions that should be based on estimated taxes? Or, do you 'settle up' for taxes at the end of the tax year?
For 401k distributions, should I plan to withdraw what I need for actual expenses plus estimated taxes, or 'settle up' the tax bill later?
And - for those that draw down for expenses in yearly increments - does that big single distribution have any tax implications? If, for example, I need $50K for the year, before taxes, does that single distribution check have a bigger tax impact for withholdings compared to spreading it out over monthly distributions?
Thanks!