Many older Americans turn to tax-deferred retirement accounts to cover unplanned costs like debt, home repairs, and medical bills. However, financial planners caution that ordinary income taxes require grossing up distributions, which can severely deplete nest eggs faster than expected. The resulting income spikes may also trigger costly surcharges on Medicare coverage and increase taxes owed on Social Security benefits. According to Vanguard data, about 15% of separated 401(k) owners ages 60 to 72 with at least $100,000 took an ad hoc withdrawal in 2025.
Key points
Tapping traditional retirement accounts requires withdrawing extra funds to account for t…: Tapping traditional retirement accounts requires withdrawing extra funds to account for taxes levied on the distribution itself.
Ad hoc withdrawals can push overall income high enough to make up to 85% of Social Securi…: Ad hoc withdrawals can push overall income high enough to make up to 85% of Social Security benefits taxable.
Surcharges for Medicare premiums take effect once married couples filing jointly exceed $…: Surcharges for Medicare premiums take effect once married couples filing jointly exceed $218,000 in modified adjusted gross income.
Sources checked by our analysis pipeline: 1
Retirees facing a large expense that's not in their regular household budget may turn to their traditional 401(k) or individual retirement account balances to cover it.
While retirement savings may be the easiest place to turn for the money, financial advisors say there are a few things worth considering before making one-off withdrawals.
"Be aware of the fact that it's not as simple as just taking out the amount of money that [covers] what you want it for," said certified financial planner Victoria Trumbower, managing member of Trumbower Financial Advisors in Bethesda, Maryland. The firm ranked No. 19 on CNBC's Financial Advisor 100 list for 2026.
At the same time, research shows that many retirees aren't even spending their nest egg. About a third still have 100% or more of their initial assets when they reach their mid-80s, according to a May study by the Employee Benefit Research Institute, a nonpartisan research group.
"Retirement savings are meant to be spent," said CFP Alex Canellopoulos, director of wealth and a partner with Vista Capital Partners in Portland, Oregon. "A one-time withdrawal…
Investors observed downward pressure on the enterprise technology provider during current market trading. Market participants are tracking shifts affecting the company's valuation as trading unfolds. The movement reflects an ongoing reassessment of the hardware maker's immediate positioning.
Market participants are monitoring unexpected downward pressure on the retailer during the current trading session. While the equity has lost ground, the exact catalysts behind the decline currently remain undisclosed. Investors are left awaiting further clarification regarding the operational or market factors influencing the move.
The high-stakes legal dispute centers on allegations that the online brokerage withheld interim financial data during its public debut. By reviewing the appellate decision, the justices will determine whether investors can proceed with claims regarding corporate disclosure requirements. The outcome could establish critical legal boundaries for disclosure obligations during major corporate stock offerings.