When should I take money from my 401k if I am 60 years old
On One Hand: No Penalty After 59 1/2Most 401(k) withdrawals before the age of 59 1/2 are assessed a 10 percent IRS penalty. Thus, for a 60 year old investor, there is no longer an early withdrawal penalty. As a 401(k) has usually been invested for at least 20 or 30 years, many investors are eager to withdraw and use their money as soon as they are allowed.
On the Other: Withdrawals Are Still TaxableNo matter when you take a withdrawal from a 401(k), it is always taxable. If a worker is 60 years old and still employed, the additional income from a withdrawal may place them in a hig free run 2 her tax bracket. Ad free run 2 ditionally, any withdrawn funds no longer benefit from tax defe free run 2 rred growth.
Bottom LineAs a 401(k) is intended for retirement savings, investors should generally leave their fun free run 2 ds in the plan unless they are retired and need additional income. According to IRS tables, a 60 year old American has a life expectancy of over 25 more years, so the 401(k) investor should take care not to withdraw savings that he may need over an extended retirement period.