Question

Retirement in 2021

Forum|Forum|6 years ago
February 29, 2020
1 reply
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My retirement date is April 2021. What I am worried about is the taxable income for that year. I currently have a 18 month land contract coming due in June 2021 and then the remaining amount is due. It is $143,000. I have a 457 plan that can pay the amount however, will this amount increase my taxable income for that year? So, if I retire in April 2021 and withdraw the amount needed for the pay off amount, is that added as taxable income for the year. I know that i will have to pay state and federal tax upon withdraw. Any advice would be helpful!

Not A Product Question

ColeenD3

Yes, it will be taxable.

"If you have a 457(f) plan at a private non-profit, be prepared for a giant hit when you retire. The entire amount in your account is considered taxable upon your separation from service. In most cases, fund assets will be distributed to you in a lump sum and will be subject to FICA, federal, and state taxes at that time."

LUMP SUM