Macrx
I'm 64 retired married spouse 65 on Medicare and I'm on ACA. My premium is $8/month. We live on social security alone. I have 401k with a substantial amount in it. My dilemma is if I use it my insurance premium goes up and my social security goes back to the government in tax. My question is how much can I take out of my 401k without getting crushed with penalties and taxes. Our combined social security is approximately $44k. Can I take some money out of my 401k in 2023 or 2024?
Answers
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It's great that you're so conscious of your tax situation. As soon as you begin taking distributions from your 401k, your health insurance premium will likely need to be adjusted, so you will want to discuss that with your Marketplace Insurance provider before doing anything with your 401k.
You are correct that your Social Security Income may become taxable once you begin taking distributions. We recommend consulting with a tax planner for advice on how to avoid taxation or lessen it. You're always welcome to log into your account or create a new account to play around with distribution amounts to decide if it would be beneficial to take a 401k distributions.
