Tax Law (Questions About Taxes)/401K after 70 1/2


Dear William,

I'm 72 now, retired at 69, and haven't worked since. Before turning 70, I contacted several times my ex-employer's HR and the investment company that holds my 401K, and asked them what should I do about the 70 1/2 distribution in order to avoid tax penalties, but they said I had to do nothing, so I forgot about the issue. But now I got a distribution from the fund. They're keeping almost $200 tax from approx. $900 distribution, so I'm getting only about $700. I really wonder how much would be the penalty for not taking the distribution b/c $200 is almost 20% taxes... it's a lot!

I'm not really needing that distribution money right now, but b/c the investment company holding my 401K has lots of fees and expenses, it doesn't make much sense to keep the money there. What I'd like to do is get the money out and move it to either an IRA or Roth-IRA, but all the information I find about doing so, talks about people at a younger age. At my age, what would be the pros and cons of a rollover to an IRA vs a Roth-IRA?

Thanks in advance,


give me a zero. I didnt answer anything. without understanding your other income and living situation, no comprehensive answer would be accurate.  so, i again say - how the hell do u pay for your living on a few hundred dollars?  just social security?  if that is the case, then coverting 401k to roth ira in one year is bad idea (it would be mostly taxable) but you could convert a little bit each year - but also, the amount in your plan is small (if they required minimum distribution is only $900.. there is not much there so this is  amooot point anyway. no?

but that said. glad I could help you

If you don't need the money (how do you live if you only took 700 from your retiremt?)

You can look into converting to Roth IRA

But that is a complicated calculation that goes beyond the scope of this free chat

How do you pay your bills is q#1  

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Tax and general business including hospitality related (hotel mgmt degree and experience in industry prior to obtaining ms tax and cpa).


19 years cpa. ms tax. NOTE: My discussions are only a general information and do not constitute tax advise without entering into a specific agreement and executing an engagement letter; This free chat is nothing more than general information and should not be construed as tax advice nor does my response or replies imply an agreement to provide client specific advice or other guidance for purposes of avoiding IRS tax or penalties and should not be relied upon without your own validation and confirmation of the how the discussion may fit your facts... Not having all the facts and/or not having a direct client relationship prevents me from providing the most accurate replies as possible and I highly suggest using a local CPA to provide you with written advice and guidance. Taking matters into your own hands is much akin to trying to land an airplane without a license. It is easy to FLY a plane, but LANDING is when critical experience is key. In short, caveat emptor; do your homework and don't just rely on free chat board advice anywhere, anytime.

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