IRAs, 401(k)s and 403(b)s
Working Americans love to save for retirement in tax-deferred individual retirement accounts and workplace-based plans such as 401(k)s and 403(b)s because it boosts retirement security and reduces taxable income. But in retirement, distributions from those plans are fully taxable as ordinary income at the federal level, with tax rates ranging from 10% to 37%.
Account holders must start taking annual required minimum distributions after age 70½. Those who continue to work beyond that age can delay their 401(k) and 403(b) distributions until they retire, but not their IRA distributions.
