This 401(k) Move Could Cost Retirees Up to $487 a Month for a Year

Published August 22, 2026 · Category: Finance

Overview

When you withdraw money from a 401(k), you probably already know that you have to consider the effect on your tax rate. Too large a withdrawal could push you into a higher tax bracket by increasing your household income. Withdrawing too much from your account could also put you at risk of draining the account if you don't leave enough invested.

There's another risk, though. If you aren't careful, it's possible that a big 401(k) withdrawal could cost you as much as an extra $487 per month for a year. That's because of a rule many people don't know about, and it could come as a very unpleasant financial shock.

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Details

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Source

Originally published at www.fool.com.

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