# Retirees May Spend $900k 401(k) Before Social Security

> Retirees can spend $900,000 from traditional 401(k) before Social Security starts to avoid high taxes.
- Title: Retirees May Spend $900k 401(k) Before Social Security
- Summary: Retirees can spend $900,000 from traditional 401(k) before Social Security starts to avoid high taxes. Retirees with $900,000 traditional 401(k) may withdraw…
- Keywords: social security, 401k, tax deduction, retirement planning, traditional 401k, taxable income, federal income tax, social security benefits, taxable distributions, Retirees, May, Spend
- Source: 24/7 Wall St. — https://247wallst.com/personal-finance/2026/10/20/why-a-retiree-might-spend-a-900000-traditional-401k-before-starting-social-security
- Author: Gerelyn Terzo
- Published: 2026-10-20T15:00:32+00:00
- Read time: 1 min
- Topics: social security, 401k, tax deduction, retirement planning, traditional 401k, taxable income, federal income tax, social security benefits, taxable distributions
## Tax-Free Window for Retirees
Retirees may spend $900,000 from traditional 401(k) before Social Security starts to avoid high taxes.
## Tax Deduction Covers First Withdrawals
Under 2026 rules, married couples get a $32,200 deduction that cancels out first withdrawals.
## Tax Bill Depends on Timing
Taxable distributions from 401(k) are taxed at rates based on the household's income that year.
## Spending vs. Converting
Spending pays current bills; converting moves money to Roth accounts with no required withdrawals.
## Early Drawdowns Risk 80s Shortfall
Spending first leaves less for later but preserves outside savings for 80s expenses.
## Market Timing Matters
Market drops early in retirement force selling at low prices, worsening financial damage.
## Check 10% Penalty Age
Both spouses must be past the age for 10% early-withdrawal penalty or qualify for exception.
## Set Withdrawal Before December
Project this year's return and fill the $32,200 deduction room with 401(k) withdrawals before year-end.
## Key takeaway

Retirees with $900,000 traditional 401(k) may withdraw funds before Social Security starts to use tax-free deduction room.