Expenses != income. 12% bracket this year is likely not correct. OP was working so far this year.Pull Roth contributions. Roll the 401k into an IRA and pay the penalty. $7k/month puts them in the 12% bracket. The penalty pushes them to the 22% bracket, which is true of many households. Paying the penalty can even be a better strategy than putting the money in a taxable brokerage account: https://www.madfientist.com/how-to-acce ... nds-early/OP is 55+. What if they were 53 year old or plan says you must take lump-sum only?
OP didn't disclose but even if we assume some low-to-avg numbers: Say spouse makes $60k and OP makes $150k. Based on this, their income for the year will be 60 + 0.75*150 = $172.5. Not in 12% bracket.
This is the reason I asked what was marginal tax rate last year and what will be this year.
Statistics: Posted by babystep — Sun Aug 31, 2025 9:44 am — Replies 28 — Views 4136