I pay very little taxes in retirement, do you?

[hikernut]

Originally Posted by selhars

Aaaah, yes. But if I'm just pulling it out in order to pay lower/less taxes later -- that creates the issue of where to now put that money. I'm taking it out -- just to -- what? reinvest it where? in what? Same funds but now in taxable accounts??

Can convert to Roth IRA...

[Westcoasters]

Originally Posted by jlawrence01

Be careful.

You might want to leave the 401(k) in place until you turn 59.5 ... If you leave the plan after 55, you can make withdrawals after 55 without the 10% penalty. You can't do that from an IRA. That would give you greater flexibility if you should need the money before you hit the 59.5 threshold.

I couldn't do that as I retired at 53.

An excellent post jlawrence01! A subtle point, but one that could be critical.

[reed303]

Originally Posted by reed303

Using this calculator may help you:
How much of my social security benefit may be taxed? | Calculators by CalcXML

In general, you want to start drawing down your IRAs soon after age 59.5, and draw as much as possible , while staying in your minimum tax bracket. ( referred to as "topping up the bracket"). And before you start SS benefits.

Originally Posted by selhars

Aaaah, yes. But if I'm just pulling it out in order to pay lower/less taxes later -- that creates the issue of where to now put that money. I'm taking it out -- just to -- what? reinvest it where? in what? Same funds but now in taxable accounts?? A PART of me think if that's all I'm doing it for just leave it be.

You do it to reduce the effect of later, higher, age 70.5 RMDs on the tax-ability of your SS benefits. You would want to do some "what-if" calculations assuming you started RMDs, using the above calculator.

The withdrawals can be "saved" any place you like. That is a whole issue in itself once you switch from accumulation of funds to retirement conservation of funds.