The $3 Million 401(k) Problem High Earners Don’t See Coming

Quick Read Required minimum distributions (RMDs) starting at age 73 on a $3 million 401(k) create a compounding tax collision: the initial $113,000 withdrawal grows to $131,600+ by age 75 while triggering Social Security taxation, Medicare IRMAA surcharges up to $12,710 annually, and an effective marginal tax rate near 40%, making the original 37-cent tax deduction during peak earning years cost significantly more on withdrawal. Retirees with $3 million+ balances should use the gap years between age 65 ...