at 59.1/2 year old i can withdraw 401k and ira but still working when end the year i need to pay tax if total?

Question

income around 40000 i have to pay palnaty too

Answer 1

Yes, once you reach 59-1/2, you can withdraw from your IRA or 401K without penalty, but no matter how old you are you'll have to pay regular income tax on the withdrawal at whatever your tax rate is. It doesn't matter whether you are still working or not.

Answer 2

I'm not clear on your question exactly.
Here are some options on withdrawing some or all of your money from a 401(k):
http://www.aarp.org/bulletin/yourmoney/Articles/a2003-06-25-takethecash.html/page=2

Once you're 59 1/2 you should be able to access either account without a penalty, but there are limits on what you can take out without being taxed and/or penalized. If you took out the allowed amount, however, you should not be penalized.

If you have a Roth IRA, you've already paid the taxes on that--the advantage of the Roth is that it's not taxed as it was already taxed. If it's a traditional IRA, then yes, you pay income tax on that. Again, unless you're taking more than allowed or cashing out a CD early or such, I don't know why you'd be penalized after hitting 59 1/2.

As 401(k) money is pre-tax even if you were going to have less than $40K in income, you'd pay tax on that (whatever bracket you fall into).

You might want to speak with your HR (Human Resources) department or the location of your funds (such as IRA) to be clear on what your specific options are to avoid penalties and keep taxes down as much as possible.

Answer 3

I have withdrawn from my 401K twice this year. You pay a 20% tax , but once you are 59 1/2 there is no penality. It doesn't matter if your working or not.