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Typical 401(k) for Over-65 Workers Holds About $88,000, Vanguard Says

Original: Vanguard Says the Typical 401(k) for Workers Over 65 Holds About $88,000. Taking It as a Lump Sum the Year You Retire Can Hand a Quarter of It to the IRS

Vanguard data indicates the average 401(k) balance for workers over 65 is roughly $88,000. Financial commentary warns that cashing out the entire balance as a lump sum in the year of retirement could push a retiree into a higher tax bracket, potentially handing about a quarter of the savings to the IRS. The report is prompting discussion about spreading withdrawals across years and other tax-efficient ways to draw down retirement accounts.

Why now: Retirees are weighing the tax cost of lump-sum 401(k) withdrawals against the modest balances many workers actually hold.

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• Vanguard Says the Typical 401(k) for Workers Over 65 Holds About $88,000. Taking It as a Lump Sum the Year You Retire Can Hand a Quarter of It to the IRS · 24/7 Wall St.

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