Sean (Age 74 at End of 2014) Retired Five Years

Essay

Sean (age 74 at end of 2014) retired five years ago. The balance in his 401(k) account on December 31, 2013 was $1,700,000 and the balance in his account on December 31, 2014 was $1,750,000. In 2013, Sean received a distribution of $50,000 from his 401(k) account. Assuming Sean's marginal tax rate is 25 percent, what amount of the $50,000 distribution will Sean have left after paying income tax on the distribution and paying any minimum distribution penalties (use the IRS table below in determining the minimum distribution penalty, if any). $$\begin{array} { | c | c | l | } \hline \begin{array} { c } \text { Age of } \\\text { Participant }\end{array} & \begin{array} { c } \text { Distribution } \\\text { Period }\end{array} & { \begin{array} { c } \text { Applicable } \\\text { Percentage }\end{array} } \\\hline 70 & 27.4 & 3.65 \% \\\hline 71 & 26.5 & 3.77 \% \\\hline 72 & 25.6 & 3.91 \% \\\hline 73 & 24.7 & 4.05 \% \\\hline 74 & 23.8 & 4.20 \% \\\hline 75 & 22.9 & 4.37 \% \\\hline\end{array}$$