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Retiring at 62 With $1.6 Million in a 401(k)? Your Biggest Tax Problem Is 11 Years Away
['Marc Guberti', 'July', 'Min Read']
Yahoo Finance
Quick ReadA $1.6 million 401(k) grows to roughly $3 million by age 73, forcing RMDs that push a married couple's effective tax rate near 40%.
Front-load conversions before Social Security starts at 70, and always pay the tax bill from a taxable account, never from the converted funds.
A 62-year-old just retired with $1.6 million in a traditional 401(k), no pension, and plans to delay Social Security until 70.
Ignored, the same $1.6 million compounds into a tax problem that eats into retirement income.
Why the Bill Balloons at 73Left untouched at a 6% compound return, $1.6 million grows to roughly $3 million by age 73.