Assuming age 62 or so, what are the tax implications on 401k withdrawals? I am particularly interested in capital gains.

Let's say I invested $100,000.

If that money does not appreciate and I withdraw all of it, no question I’ll owe regular income taxes on all of it.

Now let’s say that through the brilliance of my investing, it has grown to $200,000 over several years. Let’s then assume I am going to withdraw $100k this year and $100k next year. Is all of that treated as income or is half of it considered capital gain and taxed at the lower rate?

Also, what are the implications if half of the $100k came from an employer match?


All distributions from a regular (non-Roth) 401k are regular income. IRS: Distributions, including earnings, are includible in taxable income at retirement (except for qualified distributions of designated Roth accounts).

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